McDonald’s net income down almost 4%20/10/2012 - 09:07:35
Tough competition in the US and the weakening economy abroad was a double whammy for McDonald’s in the third-quarter, sending the burger chain’s net income down nearly 4%.
McDonald’s said it was adjusting some of its plans to deal with the pressures, including stepping up advertising for its dollar menu and bringing back the popular McRib sandwich nationally in December to drive traffic into US stores.
The world’s largest hamburger chain with 33,000 locations worldwide has thrived in boom and bust times by selling cheap eats and constantly updating its menu.
But global economic pressures and intensifying competition are wearing at the company, which does two-thirds of its business overseas.
“When economic crisis began in 2008, few people thought the environment would still be as uncertain and fragile as it is today,” said chief executive Don Thompson in a call with analysts.
“It is clear however that this operating environment is the new normal. As such our near-term focus is on stabilising and growing traffic and market share.”
Mr Thompson said revenue in stores open at least 13 months, a key restaurant metric, is trending negative so far in October.
That news sent shares down $4.14, or 4.5%, to close at $88.72. The stock had been down 7% since the beginning of the year.
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