Subject:  Cold helps chill McDonald's sales |
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Date Posted: 07:34:38 03/13/03 Thu
Cold helps chill McDonald's sales
Monthly decline is 12th in a row
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By John Schmeltzer
Tribune staff reporter
Published March 13, 2003
Slow consumer spending and severe weather combined in February to help drive worldwide sales for McDonald's Corp., the largest fast-food chain, down for the 12th consecutive month.
Sales at restaurants open at least 13 months declined 4.7 percent, compared with a 0.4 percent gain in February 2002, the Oak Brook-based company said. Sales in the U.S., the company's largest market, fell 4.4 percent in February.
Despite the drop, Jim Cantalupo, who became chairman and chief executive in January, said he is "confident that we have the right team in place to aggressively confront our challenges and revitalize our business."
Shares of McDonald's tumbled sharply on opening, but recovered during the day to close at $12.38, down 9 cents on the New York Stock Exchange. The stock, which has declined 23 percent this year, is trading at nearly a 10-year low. It is down 60 percent from a 52-week high of $30.72 recorded last May.
"McDonald's, Wendy's and all fast food had a tough February with the snowstorm out East," said Carl Sibilski, an analyst with Morningstar Inc. "It wasn't surprising to see them coming in with mid-single-digit losses."
A blizzard dumped as much as 30 inches of snow on the East Coast during the Presidents' Day holiday weekend, and bitterly cold weather has plagued most of the Midwest since the beginning of January.
Still, McDonald's fared worse than most of its rivals.
Wendy's reported that February sales at restaurants open more than a year fell 2.6 percent, compared with a 3.9 percent gain a year ago.
Despite the disappointing overall sales results, Sibilski noted that McDonald's sales in Europe were quite good, rising 20 percent during the month, according to the company.
However, Cantalupo has little time to spare to develop a plan that will boost sales while offering faster, friendlier service. Earlier this week, McDonald's added salads featuring dressings by actor Paul Newman in a bid to attract more health-conscious consumers.
Cantalupo indicated that he will begin discussing the "factors" behind the company's results when first-quarter earnings are released.
Many investors, however, don't expect a quick rebound in the company's fortunes.
"I don't expect sales to get better overnight," fund manager Jean-Marie Eveillard told Bloomberg News. Eveillard helps manage about $3.5 billion at Arnhold & S. Bleichroeder Inc., including 138,500 McDonald's shares.
"I don't think management will come up with a miracle in the next month or two."
Copyright © 2003, Chicago Tribune
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