McDonald’s second-quarter earnings beat Wall Street estimates, but U.S. sales cooled more than expected and revenue tumbled 12 percent.Sales at company-owned restaurants plunged by 27 percent during the second quarter and same-store sales in the U.S. grew slower-than-anticipated rate of 2.6 percent. Wall Street analysts were expecting growth of 3 percent. A jump in international sales, especially in the U.K. and France, helped bolster the results.
A lower effective tax rate helped McDonald’s squeeze out more earnings than analysts projected in an otherwise though quarter marked by a nationwide recall of salads at about 3,000 of its U.S. restaurants. Public health officials have traced an outbreak of cyclosporiasis back to lettuce tainted by the cyclospora parasites. The Centers for Disease Control and Prevention said last week it had traced at lease 163 cases across 10 states back to McDonald’s . McDonald’s said all of the locations have been resupplied from a different vendor.
Shares of McDonald’s were down 2.5 percent yesterday. Following is what the company reported versus what Wall Street expected.
- Adjusted earnings: $1.99 per share vs. $1.92 per share expected by analysts polled by Thomson Reuters.
- Revenue: $5.35 billion vs. $5.32 billion expected by analysts polled by Thomson Reuters.
- Same-store sales: 4 percent growth vs 3.5 percent expected by StreetAccount.
“We’re pleased with the results of our international business and the progress we are making in the United States, on executing on our Velocity Growth Plan priorities,” CEO Steve Easterbrook said in a statement. McDonald’s said it had expanding delivery to 13,000 locations in 60 markets. At these locations, delivery accounts for 10 percent of sales.
