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McDonald's earnings edge down; says turnaround on track
[NEW YORK] McDonald's reported slightly lower fourth-quarter earnings Monday as strong sales in Britain, Japan, China offset a drop in the United States.
The fast-food giant, which modified its menu in its home market after a lengthy slump, and restructured its international business, said its turnaround remained on track.
The weaker performance in the US was due partly to more difficult year-over-year comparisons in late 2016 after the iconic chain unveiled the popular "all-day breakfast" plan a year earlier. Comparable sales fell 1.3 per cent in the latest quarter.
"For McDonald's, 2016 was a year of purposeful change as we focused on the key elements of our turnaround plan - strengthening our business to drive long-term sustainable growth by sharpening our focus on our customers, right-sizing our structure and putting the right talent in place to lead the company into the future," said Steve Easterbrook, who was appointed chief executive in 2015 after the chain's lengthy slump.
Net income for the fourth quarter was US$1.2 billion, down a hair from the year-ago period, while revenues were US$6 billion, down five per cent.
The chain's international strategy has included shifting from a structure that organises countries by region to one centred around market opportunity, such as "high growth" and "foundational markets."
High-growth comparable sales rose 4.7 per cent from the year-ago period, thanks to China. Comparable sales in foundational markets surged 11.1 per cent, with strength in Japan and some Latin American countries.
Global comparable sales rose 2.7 per cent.
For the full year, McDonald's earnings were US$4.7 billion, up three per cent.
Shares of McDonald's dipped 0.7 per cent to US$121.45 in pre-market trading.