McDonald's January sales dragged down by China, Japan

Mon Feb 9, 2015 11:33am EST
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By Lisa Baertlein and Yashaswini Swamynathan

(Reuters) - McDonald's Corp (MCD.N: Quote) on Monday reported a steeper-than-expected drop in January sales at established restaurants and pinned a big portion of the blame on the after-effects of food safety scandals in China and Japan.

The world's biggest fast-food chain said worldwide sales at restaurants open at least 13 months fell 1.8 percent in January. Analysts polled by Consensus Metrix were expecting a 1.2 percent drop.

January marked the eighth straight month of worldwide same-restaurant sales declines at McDonald's, which is replacing Chief Executive Don Thompson with Chief Brand Officer Steve Easterbrook following one of its worst years in decades.

The company is fighting to win back customers, particularly in the United States, after failing to keep up with diners' increasing demand for healthier, fresher food. It also is grappling with economic and political turmoil in Europe, its top sales market.

Shares of the world's largest fast-food chain were down 1.1 percent at $92.96 in morning trading.

Comparable restaurant sales in the Asia Pacific, Middle East and Africa region fell 12.6 percent in January, significantly more than the 8.4 percent drop analysts expected.

Several Asian markets have yet to recover from last year's food supplier scandal in China. The incident was sparked by a local TV report that showed workers at Shanghai Husi, a major McDonald's supplier, allegedly using expired meat.

Customers were further spooked last month after objects, including a tooth and plastic, were found in McDonald's food in Japan.   Continued...

The logo of McDonald's is seen at its restaurant facade in Tokyo February 5, 2015.  REUTERS/Toru Hanai