McDonald's Profit Rises Despite Fewer Customers

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mcdonalds earnings
Tim Boyle/Bloomberg via Getty Images
BY CANDICE CHOI

NEW YORK -- McDonald's reported disappointing sales for its fourth quarter Thursday, as the world's largest hamburger chain saw fewer customers visit its restaurants.

The Oak Brook, Ill.-based company says global sales slipped 0.1 percent at established locations. In the U.S., where it recently revamped its Dollar Menu to include items that cost a little more, the figure fell 1.4 percent.

After outperforming its rivals for years, McDonald's (MCD) is facing a mix of challenges, including a shift in eating habits toward foods people feel are fresher or healthier. CEO Don Thompson has been working to better reflect those tastes by adding options such as chicken wraps and egg whites for its breakfast sandwiches.

McDonald's is also facing heightened competition from old rivals such as Burger King and Wendy's, and all three chains have been aggressively promoting their value menus to fight for customers.

Analysts have raised concerns that the focus on deals will eat into profit margins. To address that, McDonald's in early November updated its decade-old Dollar Menu; the "Dollar Menu & More" now includes items that cost around $2 and $5.

During the quarter, McDonald's said customers on average spent more per visit. But global comparable sales were dragged down by a decline in guest counts.

In Europe, sales at locations open at least a year rose 1 percent.
It fell 2.4 percent for the unit encompassing Asia, the Middle East and Africa.

For January, CEO Don Thompson says the figure is expected to be flat.

The figure is a key metric because it strips out the volatility of newly opened and closed locations.

For the quarter, McDonald's earned $1.4 billion, or $1.40 a share, which is a penny more than Wall Street expected. A year ago, it earned $1.39 billion, or $1.38 a share.

Revenue rose to $7.09 billion, shy of the $7.1 billion analysts expected.

The company plans to open between 1,500 and 1,600 new restaurants in 2014, and remodel 1,000 existing locations. It currently has more than 34,000 locations worldwide.

Shares of McDonald's Corp. slipped 13 cents to $94.75 in premarket trading.


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122 Comments

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dodie1990

You can get a real meal served by a human being on a plate and with silverware at a locally owned restaurant. You will get served instead of standing in a line and you will get more and better quality food cheaper than at McDonald's. Plus the money at a locally owned restaurant stays in the community.

January 25 2014 at 11:06 AM Report abuse rate up rate down Reply
jimbo675

McDonalds was better off when it stayed within one product range - the hamburger. They are now offering too many menu items and the quality is poor on most. Service is poor as the workers time is divided on fixing multiple items. Prices are ridiculous and the quality of the food is not there. Pricing for French fries is thievery. Pricing for soft drinks is outrageous. Another issue is that you can go from one McDonalds to another McDonalds within the same city and the prices are different - often because of who owns the franchise. McDonalds was once a leader in the hamburger field but they are no longer my choice.

January 25 2014 at 10:58 AM Report abuse rate up rate down Reply
1 reply to jimbo675's comment
rwilliamhoward

I agree! Too many menu items, cramped quarters that USED to be enough when the whole menu consisited of \'bergers, fries, shakes and \'pop. And, as pointed out above, for about the same price you can sit down, and be served, and eat with a knife and fork. All of these places should re-think what their customers REALLY WANT! And the SERVICE they render. McTirePatches are NOT what I want when I go for a \'burger. (Burgers cooked at 9 AM to be re-heated for the Noon \'rush\'.)

January 25 2014 at 11:46 AM Report abuse rate up rate down Reply
DAVE

Have found if your constipated its an excelent place to eat. Otherwise I eat thier one evey 2 years or so

January 25 2014 at 10:55 AM Report abuse rate up rate down Reply
JesusPresley

the problem is human greed which goes all the way back to the the jews in the desert when god sett manna from heaven and told the people to only take what they need for that day and do Not Hoard ...Trust the Lord to provide your daily bread ...But sadly the people, being the same then as they are today, were greedy and, like a bunch of HOGS, Hoarded all they could lay their hands on. And the nest day when they woke up, they found that it had turned overnight - all was full of Worms or Maggots....

And so has our society today become corrupt by Human Greed.....- the Worms and Maggots are the Lack of Security, the poverty, murder, theft and General Miserableness among the masses.....the lord said do not hoard ...love your neighbor ...share...etc.......BUT....modern society says GRAB All you Can for Yourselves any way you can Get it......to Hell with your Neighbor and Brother........Hoard, Hoard, Hoard!!! Modern Society is Anti-Christ - it has SUBstituted its ideas in place of Christ's.

January 25 2014 at 10:48 AM Report abuse +1 rate up rate down Reply
aaltexan

FIRST and FOREMOST, Mcdonalds has to start by NOT allowing the money handler touch your food or the bag or any other item that is coming to US. Money is very,very DIRTY . .....PLEASE!!!

January 25 2014 at 10:40 AM Report abuse rate up rate down Reply
a.cazeau

THEY MIGHT MAKE MORE MONEY IF THEY CHANGE THEIR EMPLOYEES INSTEAD OF THE MENU . Serving Ppls old ass 30 mins old hamburger 45 mins olds chicken nuggets. HOW DO YOU EXPECT TO MAKE A PROFIT WHEN YOU RE SELLING NON EATABLE FOOD .....??make food looks like������������������������.

January 25 2014 at 10:35 AM Report abuse rate up rate down Reply
yakmann2

Like Wendys, McDOnalds screwed up their dollar menu by rasising the prices on what made it popular. Of course the Cheif Excutuive IDIOT who came up with the idea will get a raise. Since they raised the prices haven't been to either McDOnalds or WENDYs.

January 25 2014 at 10:31 AM Report abuse rate up rate down Reply
1 reply to yakmann2's comment
rwilliamhoward

Wendy\'s messed up YEARS ago. I think they changed hands about 20 years ago, when they changed the tables in the front of the stores. Their \'burgers went from juicy and delicious to sort of juicy and flavorless.

January 25 2014 at 11:53 AM Report abuse rate up rate down Reply
a.cazeau

Mc Donald's suck. They ll never get my money .

January 25 2014 at 10:23 AM Report abuse rate up rate down Reply
beniehill

Greater profits hell yeah, the raise the price and reduced this size of the burger. I very rarely go there anymore.

January 25 2014 at 10:18 AM Report abuse rate up rate down Reply
bobfmlco

I wondered how long it would take for Mac to feel the effects of poor employee attitiudes/service. We also noticed the dollar menu signs have frequently been moved to a 'hard to see' locations on the store walls. On the other hand, BK has made vast improvements in the past year in quality, service and offer numerous specials that help the pocketbook.

January 25 2014 at 10:17 AM Report abuse rate up rate down Reply