New York: McDonald’s Corp reported a 30 per cent fall in quarterly profit due to a food scandal in China and tough competition in the United States, and the world’s largest restaurant chain said these factors were expected to hurt current-quarter results.
The company’s shares fell 2 per cent in premarket trading after it also said it expected a fall in same-restaurant sales for October.
McDonald’s U.S. and global comparable sales fell by a steeper-than-expected 3.3 per cent in the third quarter.
The company has been struggling in the U.S. market, where the fast food it helped pioneer is falling out of favour, with customers choosing healthier options available at chains such as Chipotle Mexican Grill.
McDonald’s business in Europe, its biggest market, was hurt by issues in Russia and Germany. Sales in China, its fastest-growing market, plunged due to a supplier scandal.
“McDonald’s third-quarter results reflect a significant decline versus a year ago ... by all measures, our performance fell short of our expectations,” Chief Executive Don Thompson said in a statement.
Same-restaurant sales at McDonald’s Asia-Pacific, Middle East and Africa (APMEA) business tumbled 9.9 per cent, while those in Europe fell 1.4 per cent.
Analysts on average had expected same-restaurant sales to fall 3 per cent globally, 2.9 per cent in the United States, 10.6 per cent in APMEA and 0.3 per cent in Europe, according to research firm Consensus Metrix.
McDonald’s net income fell to $1.07 billion, or $1.09 per share, in the quarter ended Sept. 30 from $1.52 billion, or $1.52 per share, a year earlier.
Total revenue fell 4.6 per cent to $6.99 billion.
McDonald’s shares closed at $91.59 on the New York Stock Exchange on Monday. Up to Monday’s close, the stock had fallen 5.6 per cent this year.
