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NEW YORK - McDonald's Corp., the world's largest restaurant company, warned Tuesday it would post its first-ever quarterly as it deals with intense competition and deteriorating sales, Reuters reports.
The U.S. fast-food market has become increasingly competitive as McDonald's, hamburger rivals Burger King Corp. and Wendy's International Inc., and Taco Bell parent Yum Brands Inc. struggle to maintain market share as consumer tastes change and other fast-food options emerge, such as sandwich chain Panera Bread Co.
McDonald's has experimented with other concepts, including pizza and Mexican-food chains, while Wendy's has relied on its Canadian doughnut chain to drive growth. Yum has been pushing aggressively into overseas markets such as China.
So far in the fourth quarter, McDonald's sales at stores open at least 13 months are down 1.6 percent before the effects of foreign exchange, the company said in an updated fourth-quarter earnings outlook.
Same-store sales in the United States, McDonald's largest market, fell 1.3 percent in October and November and 1.5 percent through the first 11 months of the year, a sign that the company's new discounting strategy is not meeting expectations, analysts said.
McDonald's, whose Chief Executive Jack Greenberg is resigning at year-end, also indicated that quarterly sales are worsening, with sales in December showing poorer trends than October and November. The company has reported lower earnings in seven of the past eight quarters.
Incoming CEO Jim Cantalupo, former vice chairman and president, is in the process of "aggressively reviewing" all aspects of the restaurant company's operations, moves aimed at improving financial performance. The review could result in fourth-quarter charges beyond the $390 million now earmarked for worldwide restructuring, McDonald's said.
In November, McDonald's said it would close about 175 restaurants, slash up to 600 corporate jobs and pull out of three countries in the Middle East and Latin America.
The actions signal a pullback for a company with some 30,000 worldwide restaurants that has been criticized for sacrificing profits in favor of aggressive expansion.