BUSINESS

McDonald's Earnings Down More Than 30% In A Year; Chain Plans Turnaround

04/22/2015 11:52 EDT | Updated 04/22/2015 12:59 EDT

NEW YORK -- McDonald's plans to unwrap a plan next month that it says will help turn around sales declines around the world.

CEO Steve Easterbrook, who stepped into the role just last month, said Wednesday the company will share "initial details'' of the plan May 4. He noted that the company's management team is "keenly focused on acting more quickly'' to adapt to a shifting industry.

The remarks came as the world's biggest hamburger chain said global sales declined 2.3 per cent at established locations during the first three months of the year, with results for April expected to be negative as well. The drop included a 2.6 per cent drop in the U.S., where people are increasingly heading to places that position their food as more wholesome.

For the period ended March 31, McDonald's Corp. earned $811.5 million, or 84 cents per share. That compares with $1.2 billion, or $1.21 per share, a year earlier, a 30.5 per cent decline.

Results were weighed down by 17 cents per share in charges. The stronger dollar hurt its results by 9 cents per share. Stripping out these items, earnings were $1.10 per share. That was more than the $1.05 per share analysts expected, according to Zacks Investment Research.

Shares of McDonald's Corp. added $2.30, or 2.4 per cent, to $97.17 before the market open.

Already this year, McDonald's has announced a number of changes in the U.S. including a simplified grilled chicken recipe and curbing the use of antibiotics in raising chicken. Amid ongoing protests calling for pay of $15 an hour and a union for fast-food workers, it also said this month it would raise wages and offer vacation time for workers at company-owned stores.

Still, McDonald's is trying to change its image while up against intensifying pressures.

A day earlier, Chipotle Mexican Grill said its sales rose 10.4 per cent at established locations during the quarter, as a pork shortage and bad weather damped results. The chain has been enjoying strong sales growth, with executives saying the company is changing the way people think about fast food.

Taco Bell's parent company, Yum Brands, said the chain's sales rose 6 per cent during the period. The increase was helped by the introduction of Taco Bell's breakfast menu, which has repeatedly targeted McDonald's in its advertising.

Meanwhile, McDonald's is struggling in other regions of the world as well. During the first quarter, the unit encompassing Asia, the Middle East and Africa reported an 8.3 per cent drop in sales at established locations because of ongoing weakness in China and consumer perception issues in Japan.

Sales at established locations dipped 0.6 per cent in Europe because of softness in France and Russia.

Revenue for the Oak Brook, Illinois-based company declined to $5.96 billion from $6.7 billion. Analysts expected $6.02 billion in revenue.

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