Positive sales in the UK helped to lift McDonalds’ comparable sales in Europe by 1.4% in the first three months of 2014.
Operating income in the region increased by 6%. The company said positive sales in the UK, France and Russia were partially offset by ongoing weakness in Germany. “Across Europe, a combination of unique limited-time food events, premium offerings and everyday affordable pricing contributed to positive performance.”
Global comparable sales in Q1 grew 0.5% reflecting higher average spend, although there was a fall in customer footfall in the US and Asia/Pacific, Middle East and Africa (APMEA). Revenues increased by 1%. Diluted earnings per share fell 4% to $1.21.
Comparable sales fell 1.7% in the US, and operating income declined 3%.
“Top-line results for the quarter reflected negative comparable guest traffic amid challenging industry dynamics and severe winter weather,” McDonald’s said. “Looking ahead, the US remains focused on improving the restaurant experience through a continued commitment to operations and service excellence, customer engagement and menu choice to drive sales and profitability.”
APMEA’s first quarter comparable sales increased 0.8% and operating income declined 10%. “Solid comparable sales performance in China and many other markets was somewhat offset by weakness in Japan, and to a lesser extent, Australia. Ongoing premium product innovation, convenience and affordability options were sales drivers for the quarter.”
The company said it expects global comparable sales to be “modestly positive” in April. Its focus is on stabilising “key priority markets” including the US, Germany, Australia and Japan.
McDonald’s president and chief executive Don Thompson said: “In the near term, we are prioritising our efforts around those elements of the restaurant experience that are most impactful - offering the best food and beverage options and delivering outstanding service.
“For the long term, we are focused on more effectively leveraging consumer insights to guide our global growth priorities of optimising our menu, modernizing the customer experience and broadening accessibility to brand McDonald’s. We are intent on pursuing initiatives that will strengthen our relationship with our customers to reignite our business momentum.”
