McDonald’s April Sales Trail Estimates as U.S. Gains Slow
McDonald’s Corp. (MCD), the world’s largest restaurant chain, said sales at stores open at least 13 months rose 3.3 percent worldwide last month, trailing analysts’ estimates, as U.S. sales growth decelerated.
Analysts projected a gain of 4.3 percent, the average of 13 estimates compiled by Consensus Metrix. Sales in the U.S. advanced 3.3 percent, the slowest gain in 11 months, the Oak Brook, Illinois-based company said today in a statement. Analysts estimated an increase of 5.2 percent.
McDonald’s is working to refine its menu and modernize restaurants “amidst a challenging global economic environment,” Chief Executive Officer Jim Skinner said in the statement. Employment growth slowed in April as U.S. employers added the fewest number of jobs in six months and wages stagnated, signaling the economic expansion may be cooling.
“The entire global business slowed dramatically in the last week” of April, Brian Bittner, a New York-based analyst at Oppenheimer & Co., said in an interview. Consumer trends in the restaurant industry are “unpredictably choppy” now, he said.
Sales rose 1.1 percent in Asia Pacific, the Middle East and Africa. Analysts projected growth of 2.8 percent at locations in the region, the average estimate of analysts surveyed by Consensus Metrix, a researcher owned by Wayne, New Jersey-based Kaul Advisory Group. European sales gained 3.5 percent, topping the average estimate for a 3.2 percent increase. The company earlier said sales in Japan fell 3.6 percent in April.
McDonald’s, along with other restaurant operators, has boosted menu prices because of higher costs for items such as beef. Food costs may rise as much as 5.5 percent in the U.S. and 3.5 percent in Europe in 2012, Chief Financial Officer Peter Bensen said during a conference call on April 20.
U.S. comparable-store sales sales gained 8 percent in March, leading a 7.7 percent increase globally at McDonald’s, which has about 33,500 locations worldwide. Comparable, or same- store, sales are considered an indicator of a company’s growth because they include only older locations.
Wendy’s Co. (WEN), which has recently tried to boost sales with premium sandwiches and remodeled stores, today reported first- quarter revenue of $593.2 million, trailing analysts’ estimates of $609.2 million, the average of 15 projections compiled by Bloomberg.
Wendy’s had “softer-than expected sales and company- operated restaurant margin” during the quarter, the Dublin, Ohio-based company said in a statement. There are more than 6,500 Wendy’s restaurants worldwide.
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