New York - McDonald’s, pursuing a comeback under new Chief Executive Officer Steve Easterbrook, reported May sales that narrowly topped analysts’ projections after growth in Europe helped make up for a lingering slump in the United States.
Global same-store sales fell 0.3 percent in the period, the Oak Brook, Illinois-based company said in a statement on Monday. Analysts predicted a 0.9 percent drop on average, according to Consensus Metrix.
Europe was a bright spot for a company struggling with sluggish demand in both Asia and its home country. European comparable sales, which measures the performance of established locations, rose 2.3 percent. Analysts had projected a 0.6 percent gain.
While the sales gain in Europe is encouraging, investors are still waiting for the company’s performance in the US to improve, said Asit Sharma, an analyst at the Motley Fool.
“Today’s numbers don’t show a significant change in McDonald’s near-term performance,” he said. “Investors are still waiting to see if the company can fix its structural problems and produce meaningful revenue increases in the US.”
Easterbrook, who took over the CEO job in March, has vowed to transform the world’s largest restaurant chain into a “modern, progressive burger company”. He announced a turnaround plan last month that includes re-organising management, cutting costs and returning cash to shareholders.
McDonald’s shares were little changed in Monday’s trading, closing at $95.32 in New York. The stock has gained 1.7 percent this year.
Monthly data
McDonald’s announced in May that it would stop providing monthly sales data. The company will give its June numbers - along with its quarterly earning report in July - but that will be it. Most other companies in the fast-food and retail industries already stopped making monthly sales numbers public.
McDonald’s US sales fell 2.2 percent last month, worse than the 1.7 percent decline analysts estimated. The drop was 3.2 percent in the region that includes Asia-Pacific, the Middle East and Africa. Analysts predicted a 3.8 percent decrease.
Easterbrook has said that turning around the US business is a “burning priority” for McDonald’s. He’s focusing on convenience and value after years of losing ground to fast-casual chains like Chipotle. The strategy includes testing a slimmed-down menu for drive-thru customers. McDonald’s has struggled with a bloated menu that has confused customers and slowed down service times.
The company also recently revived the Hamburglar, reimagined as a hipster with stubble, to push its premium sirloin burgers. McDonald’s has vowed to stop selling chicken raised with some antibiotics as part of the effort to improve the perception of its food.
* With assistance from Leslie Patton in Chicago
Bloomberg