McDonald's sales fall again, but stock soars on turnaround plan
McDonald's聽Corp is developing a new turnaround plan to improve sales and profits as the company struggles to regain its footing in the highly competitive fast-food market.
Shares of the world's biggest restaurant chain by sales were up 聽4.1 percent in morning trading on Wednesday.
In its first quarterly results under new Chief Executive Steve Easterbrook,聽McDonald's聽global comparable sales at restaurants open at least 13 months fell 2.3 percent in the first quarter ended March 31.
Easterbrook will share initial details of the turnaround plan on May 4, the company said in a statement.
"Folks hoping for a near-term rise in the stock may be hanging their hat on hopes that聽McDonald's聽can spark some pizzazz in investors that day," Janney Montgomery Scott analyst聽Mark Kalinowski聽wrote in a note.
McDonald's聽is fighting to recover from food scandals in聽China聽and聽Japan聽and is facing tough competition at home in the聽United States聽from more nimble chains ranging from Chipotle Mexican Grill Inc to Burger King.
McDonald's聽Japanese unit this month forecast deeper losses this year following a series of food safety scandals that have drawn customers away.
Easterbrook has already said聽McDonald's聽USA聽will switch to chicken raised with fewer antibiotics, putting it more in step with Chipotle and Chick-fil-A.
In the聽United States,聽McDonald's聽promotions failed to attract customers in the latest quarter. U.S. comparable sales fell 2.6 percent.
Analysts on average had estimated a 1.8 percent fall in the company's global same-store sales and a 2.1 percent fall in the聽United States, according to analysts polled by research firm Consensus Metrix.
April global comparable sales are expected to be negative,聽McDonald's聽said.
Net income fell 32.6 percent to $811.5 million, or 84 cents per share. Excluding items,聽McDonald's聽earned $1.01 per share.
Analysts on average had expected a profit of $1.06 per share, according to Thomson Reuters I/B/E/S.
Revenue fell 11 percent to $5.96 billion, but were largely in line with analysts' average expectation.聽
