McDonald’s key sales metric slips in April; figure declined 2.3 per cent in the US

OAK BROOK, Ill. – McDonald’s says a key sales metric edged lower in April, with weakness across most regions.

The world’s biggest hamburger chain, which is in the midst of a turnaround plan, said Friday that global sales at established locations open at least 13 months fell 0.6 per cent in April.

Paul Westra of Stifel Nicolaus said in a client note that the dip in the April sales figure was slightly better than the 1.8 per cent decline that Consensus Metrix forecast.

In the U.S., the metric declined 2.3 per cent due to ongoing competition and lower customer traffic.

The biggest drop by region was in the Asia/Pacific, Middle East and Africa, which fell 3.8 per cent. Ongoing challenges in Japan were partially offset by strong results in Australia and other markets.

Europe was a bright spot, up 1 per cent, with solid performances in the U.K. and Germany somewhat offset by softness in Russia and France.

On Monday CEO Steve Easterbrook said that he will strip away the bureaucracy at McDonald’s Corp. so the Oak Brook, Illinois-based company can move more nimbly to keep up with changing tastes. The overhaul comes as McDonald’s profit dropped 15 per cent last year, with sales dipping in regions around the world.

“We are moving quickly to deliver a better experience to our customers and to realize our vision to become a modern, progressive burger company,” Easterbrook said in a written statement on Friday. The executive took charge of McDonald’s on March 1.

To help make the right changes more quickly, McDonald’s is restructuring its business into four units led by lean management teams.

The U.S. market, which accounts for more than 40 per cent of operating profit, recently stripped away a level of field oversight and will be its own unit.

Another unit will be made up of established international markets such as Australia and the U.K., and another with high-growth markets such as China and Russia. The countries where McDonald’s has a smaller presence will be grouped separately.

Previously, the units were segmented by geography rather than market type.

McDonald’s has acknowledged the need to simplify food preparation as well. The company has already trimmed its menu to reduce complexity for workers and make it easier for customers to decide what they want.

The stock rose $1.48 to $98.26 in afternoon trading. Its shares have fallen about 3.4 per cent over the past year.