OAK BROOK Ill. The first decline in U.S. monthly same-store sales in five years at burger giant McDonald’s Corp. marred the company’s otherwise strong first-quarter earnings report, which included a 24-percent surge in profit on strong overseas sales.
The 0.8-percent drop in domestic same-store sales for March contrasted with a quarterly same-store sales increase of 2.9 percent at U.S. locations. That quarterly gain reflected the previously reported monthly same-store sales jumps of 1.9 percent and 8.3 percent in January and February, respectively. McDonald’s said it expects its U.S. system to rebound this month and predicts that April same-store sales will increase between 2 percent and 2.5 percent.
One restaurant securities analyst said the reasons for the same-store sales dip in March could include an earlier Easter holiday this year, the difficult consumer environment, a worsening employee market and the lack of new product innovation from the No. 1 burger chain.
“We are not concerned with one month,” analyst John Ivankoe of at J.P. Morgan Securities Inc. said in a report. “April comps have improved ... We look forward to this month’s new Southern Style Chicken sandwiches and the new beverage platform to drive results over the long term, despite near-term headwinds of a challenging U.S. consumer environment.”
McDonald’s first-quarter net income totaled $946.1 million, or 81 cents per share, compared with year-ago net income of $762.4 million, or 62 cents per share. Revenue rose 6 percent in the latest quarter to $5.61 billion.
McDonald’s reported double-digit growth in both revenue and operating income in its European and Asia-Pacific, Middle East and Africa regions. Operating income in the United States rose by 5 percent, the company added, and revenue rose by 3 percent.
Same-store sales were up 11.1 percent in Europe and 9.4 percent in the Asia-Pacific, Middle East and Africa region. The European results, which were highest in the company’s history, were led by strength in France, the United Kingdom and Germany, the company said.