McDonald's (MCD) Global Comps Fell 0.5%in Oct.; Est. Drop of 2.2%

McDonald's (NYSE: MCD) announced that global comparable sales decreased 0.5% in October.

*** Consensus estimates were looking for a drop of 2.2 percent.

Performance by segment was as follows:

• U.S. down 1.0%
• Europe down 0.7%
• Asia/Pacific, Middle East and Africa (APMEA) down 4.2%

"Today's consumers increasingly prefer customizable food options, dining in a contemporary, inviting atmosphere and using more convenient ways to order and pay for their meals," said McDonald's President and Chief Executive Officer Don Thompson. "At McDonald's, we are diligently working to bring these elements of the customer experience to life through McDonald's Experience of the Future. Although October results reflect our current business challenges, we are moving with a sense of urgency to improve the trajectory of our financial performance while taking the actions necessary to pursue the Brand's long-term potential."

In October, U.S. comparable sales decreased 1.0% amid strong competitive activity. To restore business momentum, the U.S. is revamping its marketing approach, simplifying the menu and creating a new organizational structure. These initiatives are designed to better address consumer preferences and the competitive dynamics of the local markets in which we compete by bringing decision making closer to our customers.

Europe's comparable sales decreased 0.7% in October as solid performance in the U.K. was more than offset by very weak results in Russia due to factors related to the operating environment, including temporary restaurant closures. These factors, along with the significant weakening of the euro and Russian ruble, negatively impacted the segment's reported systemwide sales.

In October, APMEA's comparable sales decreased 4.2%, reflecting the ongoing impact of the supplier issue on performance in Japan and China, partly offset by strong performance in Australia. The markets affected by the supplier issue are actively executing multi-faceted initiatives to restore customer trust in the McDonald's brand while the broader APMEA segment is pursuing long-term opportunities to drive customer traffic and loyalty with unique menu, affordability and convenience options.

Strong comparable sales in McDonald's Other Countries & Corporate segment, which includes Canada and Latin America, contributed positively to the Company's global comparable sales performance for the month.

Systemwide sales for the month decreased 3.4%, or increased 1.9% in constant currencies.

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