McDonald's says rest of 2013 will be 'challenged'

McDonald’s says rest of 2013 will be ‘challenged’

McDonald's, in its second quarter report, warns of tough times ahead.

By Tiffany Hsu

July 22, 2013 8:47 AM PT

The rest of the year won’t be easy for McDonald’s Corp., according to the chief executive of the world’s largest burger chain.

Same-store sales at U.S. restaurants open more than a year were slightly negative in June, according to Don Thompson in a conference call with analysts Monday. The gauge is expected to be flat in July globally. If recent sales trends are any indication, McDonald’s results for the remaining months of 2013 “are expected to remain challenged,” he said.

“While the informal eating out market remains challenging and economic uncertainty is pressuring consumer spending, we’re continuing to differentiate the McDonald’s experience by uniting consumer insights, innovation and execution,” Thompson said.

The Oak Brook, Ill., company reported its second quarter earnings Monday, noting that global same-store sales rose 1% for the three months ended June 30.

Revenue rose to nearly $7.1 billion, up 2% and in line with Wall Street’s expectations.

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But profit, which got a 4% boost to $1.4 billion, or $1.38 a share, from $1.35 billion, or $1.32 a share, missed forecasts.

In late-morning trading in New York, McDonald’s stock was down 2.8%, or $2.76, to $97.51 a share.

Same-store sales suffered internationally, slipping 0.1% in Europe and 0.3% in the Asia, Middle East and Africa division.

But the measure was up 1% in the U.S., as the chain hustled to adapt its famously fatty meals to changing consumer tastes. More healthful options such as Chicken McWraps and Egg White Delight sandwiches emerged during the quarter. Expanding on the popularity of morning menus, McDonald’s also said it would begin offering dinner and breakfast options from midnight until 4 a.m.

In May, McDonald’s said its same-store sales were up 2.6% -- the first positive figure in months.

This month, the fast-food behemoth has been at the center of a hullabaloo over its workers’ wages. Employee-rights advocates are infuriated over a website from McDonald’s offering budget advice to its workers.

Called Practical Money Skills for Life, the website suggests that employees need two jobs to survive while allotting only $20 for monthly health insurance payments.