McDonald’s posts drop in February sales

McDonald’s posted a worse-than- predicted drop in February sales after competition grew fiercer in the US, a sign its new chief executive officer will have a deeper hole to dig out of as he works on a comeback.

US sales at stores open at least 13 months fell 4 per cent in February, the company said in a statement Monday.

Analysts had estimated a 0.7 per cent drop, according to Consensus Metrix.

The sales decreased 1.7 per cent globally, compared with a projection of a 0.3 percent dip.

The results underscore the challenges facing Steve Easterbrook, a McDonald's veteran who took over as CEO this month.

In Mr Easterbrook’s first week on the job, McDonald’s announced plans to stop serving chicken raised with some antibiotics in its US restaurants.

The company also is revamping its US operations as it tries to stem the exodus of customers to fast-casual chains like Chipotle and Panera.

“Consumer needs and preferences have changed,” the company said in Monday’s statement.

“McDonald’s current performance reflects the urgent need to evolve with today’s consumers, reset strategic priorities and restore business momentum.” McDonald’s stock rose 0.3 per cent to $97.44 as of 9:34 a.m. in New York.

McDonald’s had gained 3.7 per cent this year through the end of last week.

The company has suffered a series of setbacks in Asia, including the rationing of french fries in Japan and a scandal involving a meat supplier.

The vendor, Shanghai Husi, was accused of repackaging old meat in July, prompting McDonald’s to take products off its menus in the region.

The woes have taken a heavy toll in Japan, where McDonald’s lost $186 million in 2014. The company’s sales plunged 29 per cent in that country during February.

Bloomberg