McDonald’s recent results were worse than expected but the worst point of the slide came at the beginning of the quarter, when a deadly E.coli outbreak hit Belgium, the Netherlands and Germany, causing consumers to become more hesitant about visiting the fast food giant.
In the three months ended May 31, 2019, McDonald’s made $5.33 billion on an adjusted basis — compared to the $5.45 billion analysts had predicted on an adjusted basis.
Revenue for the quarter fell 0.9% to $6.77 billion, versus the $6.76 billion forecast by analysts.
Same-store sales fell 0.9% in the U.S., where the company warned last month that it could be negatively impacted by softer traffic and “weakening consumer confidence.”
Same-store sales in Europe were up 3.4% in the quarter, boosted by a strong performance in France and the U.K. “Overall we are confident that we have a great plan to win through the remainder of the year,” CEO Steve Easterbrook said.
He added: “I am pleased with our progress in the areas of digital, training and transformation to build a foundation for sustainable, profitable growth over the long term.”
Within the quarter, McDonald’s invested about $1.5 billion in capital expenditures, of which $320 million was spent on digital initiatives, and $90 million on new restaurants.
The company also announced a new $6 billion share buyback program, with $1.5 billion to be completed through the end of 2019.
Shares in McDonald’s fell 1.2% in pre-market trading in New York this morning.