(Reuters) - McDonald’s Corp (MCD.N) on Thursday missed U.S. same-store sales estimates for the first time in at least two years as it faces fierce competition in a slack restaurant market, sending its shares down as much as 1.5 percent in early trading.
The burger giant has been doubling down on discounting with its value menu offerings and other specials as it competes with long-time rivals and fast-growing chains such as privately held Chick-fil-A, Yum Brands Inc’s (YUM.N) Taco Bell and Dunkin’ Brands Group Inc (DNKN.O).
The company had signaled in the previous quarter it was seeing weakness in its hotly contested U.S breakfast category.
McDonald’s quarterly sales at its U.S. restaurants open for at least 13 months grew at its slowest pace in over a year to 2.6 percent, missing the average analyst estimate of a 2.96 percent rise.
In contrast to its slowing U.S. business, same-store sales for the company’s international lead markets, which included France and the United Kingdom - rose 4.9 percent, trouncing analysts’ expectation of a 3.94 percent gain.
This helped McDonald’s worldwide sales at stores open for at least 13 months to rise 4 percent and top the estimate of 3.60 percent, according to Thomson Reuters I/B/E/S.
Net income rose to about $1.50 billion, or $1.90 per share, in the second quarter ended June 30 from about $1.40 billion, or $1.70 per share, a year earlier.
Excluding items, the company earned $1.99 per share, beating the estimate of $1.92.
Revenue fell 12 percent to $5.35 billion, but edged past expectations of $5.32 billion.
The company’s stock, a Dow component, fell to $156.51 in early trading. They were down 8 percent since the start of the year, underperforming the S&P 500 Restaurants sub index .SPLRCREST.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Arun Koyyur
Our Standards:The Thomson Reuters Trust Principles.
