McDonald’s Q3 earnings beat expectations, but sales whiffed.
Global comparable store sales fell 3.3% in Q3, which was worse than the 2.9% decline expected.
“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,” CEO Don Thompson said.
Among other things, McDonald’s has been struggling with some bad PR in China following reports that vendors were supplying some stores with expired meat.
Asia-Pacific, Middle East, and Africa (APMEA) sales fell 7.5% during the quarter. Europe sales plunged 4.2% and US sales fell 4.1%.
Excluding non-recurring items, McDonald’s earned $US1.51 per share during the quarter, which was higher than the $US1.36 expected by analysts.
“We began 2014 mindful of the challenges we faced in driving sales and profitability,” Thompson said. “The internal factors and external headwinds have proven more formidable than expected and will continue into the fourth quarter, with global comparable sales for October expected to be negative.”