Global burger chain McDonald's announced results for its third quarter ended September 30 on Friday, showing minor declines in revenue, operating income and net income.
The company said much of this could be explained by variances in currency, and did not reflect a significant change in underlying performance, despite the continuing tough consumer spending environment.
"While our sales momentum and current financial results reflect today's challenging conditions, we continue to see significant long-term opportunities for brand McDonald's and remain confident in the underlying strength of our business model," chief executive Don Thompson told the market.
"We have the right plans in place to drive long-term profitable growth along with the experience and alignment throughout the McDonald's system to navigate the current environment.”
The company expects near-term top and bottom-line growth to remain pressured, as it focusses on “driving guest traffic and market share by leveraging our strategies and competitive advantages in response to the global economic, operating and competitive challenges.”
October's global comparable sales were currently trending negative, Mr Thompson said – not a good start for the fourth quarter.
Global consolidated revenues of $7.2 billion were relatively flat compared with the same period last year, but were up 4pc when measured in in constant currencies. Global consolidated operating income of $2.3 billion decreased 4pc on last year.
Asia/Pacific doing relatively better
Generally, the company’s Asia/Pacific operations, where the bulk of Australia’s grinding meat supply to McDonald’s is directed, performed better than other regions.
McDonald's US division posted a comparable sales increase of 1.2pc for the third quarter amid broad competitive activity, while operating income for the quarter declined 1pc compared with this time last year.
In the Europe region, operating income decreased 7pc for the quarter. Europe generated comparable same store sales growth of 1.8pc and delivered market share gains despite negative guest traffic. Comparable sales and operating income in Russia, the UK and France led the segment's results, partially offset by poorer outcomes in Germany.
In Asia/Pacific, Middle East and Africa (APMEA), operating income increased 3pc (4pc in constant currencies) as solid comparable sales and operating income performance in China and Australia were partly offset by ongoing weakness in Japan and other markets. Comparable sales increased 1.4pc for the quarter as limited-time offers (like the Lamburger in Australia), classic core favourites and unique value platforms attracted more customers to McDonald's.
In Japan, one of the company’s biggest markets outside the US, the Nikkei business press reported last week that McDonald’s same-store sales fell 3.6pc in September, marking year-on-year declines for six consecutive months.
Discounted hamburgers and drinks priced at 100-120 Yen sold well, but sales were stagnant for burgers priced at the Y300 level or higher, Nikkei said.