The world’s largest fast food chain saw global sales drop for the first time in three years in its most recent fiscal quarter.
Transcript:
Conway Gittens: Here’s what we’re watching on TheStreet today.
There were small moves on Wall Street to begin the week as investors prepare for a deluge of information. Investors are looking ahead to a key reading on the labor market, a press conference from the Federal Reserve, and the busiest week of earnings season so far. Microsoft, Starbucks, Electronic Arts, JetBlue and PayPal each report results on Tuesday.
In other news: Consumers are irate at McDonald’s MCD menu prices and that is leading to a re-think at the world’s largest fast-food chain.
The soul-searching follows dismal second-quarter results. A measure of global sales surprisingly dropped for the first time in over three years and profits missed expectations. McDonald’s is particularly struggling with lower income customers.
“Consumers still recognize us as the value leader versus our key competitors but it’s clear that our value leadership gap has recently shrunk. We are working to fix that with pace,” CEO Chris Kempczinksi told analysts on an earnings call.
In an attempt to lure back diners, McDonald’s is working on a plan to extend its $5 budget deal beyond August. Early consumer response to the promotion is promising, but McDonald’s admits it expects the dissatisfaction with food inflation to linger for a lot longer.
While overall inflation has moderated – the cost of eating out has not. Food away from home jumped 4.1 percent in June from a year ago, according to the Consumer Price Index. That rise was triple the price gain for eating at home.
That’ll do it for your Daily Briefing. From the New York Stock Exchange, I”m Conway Gittens with TheStreet.
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