McDonald’s Same-Store Sales Fall in February, US Sales Contract Again

Andrew Klips |

Sales at stores opened at least 13 months for McDonald’s Corp. (MCD) slumped in February, as a slight gain in Europe was more than offset by declines in the U.S. and APMEA locations. Worldwide same-store sales were down by 0.3 percent for the month versus analyst expectations of a 0.1-percent decline.

The Oak Brook, Illinois-based fast food chain operator blamed a 1.4-percent drop in U.S. sales on “challenging industry dynamics and severe winter weather.” Analysts predicted shrinkage of 0.6-percent. With more than 14,200 locations, the U.S. is the biggest single market for McDonald’s and comparable sales have contracted in the last four months, although February’s decline was better than the 3.3-percent fall in January and 3.8-percent drop in December. U.S. same-store sales so far in 2014 are down by 2.4 percent.

Sales in Asia/Pacific, Middle East and Africa (APMEA) were off by 2.6 percent against analyst calls for a 1.1-percent drop, mostly because of weakness in Japan for the world’s biggest hamburger chain. Sales in Australia were also down and the Chinese New Year falling at a different time as compared to last year hampered sales in China.

On the bright side, sales were strong in the United Kingdom and growing sales in France largely counterbalanced a decline in Germany. Analysts thought European comparable sales would be off by 0.1 percent.

McDonald’s has more than 35,000 worldwide locations in over 100 countries that are visited daily by about 70 million customers. The company has been losing some market share recently to smaller quick-service restaurants like Jack In The Box (JACK) , Burger King (BKW) and Wendy’s (WEN) . Additional pressures are coming from non-traditional competitors, such as Starbucks (SBUX) , offering sandwiches and other food products.

"We are diligently focused on strengthening our performance, however our relatively flat year-to-date global comparable sales will pressure margins in the first quarter," said Pete Bensen, chief financial officer at McDonald's, in a statement Monday morning.

Through February 28, year-to-date global comparable sales are still up 0.5 percent.  Comparable sales in Europe are up 1.3 percent and 1.6 percent in APMEA.

Shares of MCD are trading slightly lower just after the opening bell; down 0.3 percent at $95.26.  So far in 2014, shares are down by about 1 percent.

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