McDonald's Corp. posted slowing growth for a second straight quarter, the latest sign that elevated gas and food prices are weighing on consumer spending.
Sales at established US restaurants rose 0.8%, the company said Tuesday, just short of the average estimate of analysts polled by Bloomberg. While check sizes rose as customers bought on pricier items, this was partly offset by a decline in visits.
In international markets, comparable sales climbed roughly in line with market expectations. McDonald's highlighted growth in Germany, Australia, the UK and Japan, while in China comparable sales were negative.
The results suggest that restaurants are going to have to work harder to keep up their growth as rising fuel and food costs, in part sparked by the war in Iran, eat into budgets. McDonald's has stepped up efforts to spotlight cheaper meals while capitalizing on novelty and pop-culture moments to attract diners.
McDonald's shares rose 2.6% at 7:07 a.m. in premarket trading in New York, signaling the results weren't as downbeat as some analysts had feared. The shares have dropped 13% this year through Monday's close, compared with an 11% gain for the S&P 500 Index.
In the US, the company expanded its value menu with a $4 breakfast meal and more options under $3. In France, McDonald's pushed a €5 combo. Around the world, it promoted new drinks and limited-time meals tied to the hit show KPop Demon Hunters and the FIFA World Cup.
“While our playbook is working around the world, we see an opportunity to raise the bar in the US and accelerate performance in our largest market,” Chief Executive Officer Chris Kempczinski said in a statement Tuesday.
The burger chain is embarking on a multiyear plan to become more than just a fast, cheap meal, with the aim of being the first choice for family outings and other occasions. To achieve this, it's preparing to offer higher-quality food, including hand-breaded chicken, and change restaurant designs to feel more open and playful.
McDonald's is also testing automation to boost efficiency, while using influencers, toys and tie-ins with other brands to bolster its online marketing.
McDonald's named long-time executive Skye Anderson as president of its US business to bring “focus and urgency” to its efforts in the country, Kempczinski said. She replaces Joe Erlinger, who is leaving the company and has held the role for about seven years. Anderson has worked at McDonald's for nearly 30 years, and was most recently chief operating officer for the US.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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