McDonald's sales decline in October

FBN's Ashley Webster breaks down McDonald's October sales numbers.

McDonald's October Same-Store Sales Fall 0.5%

Features Reuters

McDonald's Corp's restaurant sales fell less than expected in October, the company said on Monday, but worries linger as it searches for the right recipe to compete with popular chains selling fresh made-to-order food.

Continue Reading Below

Worldwide sales at restaurants open at least 13 months were down 0.5 percent as the world's biggest fast-food chain continued to fight tough U.S. competition, the after-effects of a supplier scandal in Asia, and economic and political turmoil in Europe.

Analysts expected a 2.2 percent decline, according to research firm Consensus Metrix.

Same-restaurant sales fell 1 percent in the United States, less than the 1.9 percent decline analysts expected. Such sales have not increased at McDonald's since October 2013.

Under Chief Executive Officer Don Thompson, who took the helm in July 2012, the U.S. operation is focusing on fresh ingredients and custom sandwich toppings as it seeks to compete more effectively with popular chains like Chipotle Mexican Grill Inc and Subway, where diners pick the ingredients that go into their meals.

The Golden Arches also is giving restaurant operators more control over what they put on their menus and is expanding ordering to mobile devices and kiosks.

Continue Reading Below

The company's shares were unchanged at $95.10 in early trading.

The changes come as McDonald's also struggles to get a leg up on smaller and more-nimble rivals such as Wendy's Co, Burger King Worldwide Inc, In-N-Out Burger and Chick-fil-A.

"Market share declines continue to be an issue in major markets," Stern Agee analyst Lynne Collier said in a client note.

Same-restaurant sales were off 4.2 percent in the Asia/Pacific, Middle East and Africa region, where analysts had estimated a 6.1 percent drop.

Diners shunned McDonald's restaurants in China and Japan after a television news expose showed workers mishandling meat at a key supplier in China. McDonald's scrambled to find new sources for ingredients to make its Chicken McNuggets and Big Macs.

Europe's comparable sales decreased 0.7 per cent due to store closures in Russia and "the significant weakening of the euro and Russian ruble." Europe just edges out the United States as McDonald's top revenue market. (Reporting by Lisa Baertlein in Los Angeles and Devika Krishna Kumar in Bangalore; Editing by Maju Samuel, Joyjeet Das and Lisa Von Ahn)