McDonald’s Corporation recently announced results for the third quarter ended September 30, 2014, reflecting lower revenues, operating income and earnings per share.
Global comparable sales decrease of 3.3%, reflecting negative guest traffic in all major segments and the impact of the previously-disclosed supplier issue in certain markets in APMEA (Asia-Pacific, Middle East and Africa), while consolidated revenues decrease of 5% (4% in constant currencies), partly due to the impact of the supplier issue.
Consolidated operating income decrease of 14% (14% in constant currencies), approximately half due to the impact of the supplier issue, and the remainder largely due to soft operating performance in the U.S. and certain markets in Europe.
Europe’s third quarter comparable sales declined 1.4% and operating income decreased 2%. While consumer confidence and other issues related to the operating environment in Russia and Ukraine and ongoing weakness in Germany negatively impacted the segment’s quarterly results, the U.K. delivered positive comparable sales and operating income performance. Looking ahead, McDonald’s Europe will work to build guest traffic by pursuing targeted opportunities that leverage everyday value, classic core favorites, blended-ice beverages and key daypart initiatives, according to a company statement.
“McDonald’s third quarter results reflect a significant decline versus a year ago, with our business and financial performance pressured by a variety of factors – from a higher effective tax rate, to unusual events in the operating environments in APMEA and Europe, to under-performance in the U.S., our largest geographic segment,” said McDonald’s President and Chief Executive Officer Don Thompson. “While our ability to withstand these factors is a testament to the Company’s enduring brand and strong financial foundation, by all measures our performance fell short of our expectations.”
Don Thompson continued, “We recognize that we must demonstrate to our customers and the entire McDonald’s System that we understand the problems we face and are taking decisive action to fundamentally change the way we approach our business.”