McDonald’s Promotions, New Menu Items Fail to Jolt U.S. Sales

Sales at McDonald’s U.S. stores slipped again in the second quarter, as efforts to generate business with new featured menu items and promotions failed to lift traffic at the fast-food operator’s restaurants.

The burger chain, which is facing pressure as more consumers defect for rival chains such as Chipotle [fortune-stock symbol=”CMG”], reported same-store sales for the second quarter dropped 2% in the U.S., while operating income for that region dropped 6%. Analysts had projected a less severe 1.5% drop, according to Consensus Metrix.

President and Chief Executive Steve Easterbrook, who took on the effort to steer a turnaround at McDonald’s earlier this year, attempted to strike a positive tone despite the muted results.

“We have made meaningful progress since announcing the initial steps of McDonald’s turnaround plan in early May,” said Easterbrook. “While our second quarter results were disappointing.”

McDonald’s on Thursday said in the U.S., local market tests would continue for all-day breakfast as well as a move to streamline the menu to make service speedier. The world’s largest restaurant company has been testing limited-time menu items, like the third-of-a-pound burger, and also has made some brand image moves like reviving the Hamburglar character and pledging to stop selling chicken raised with some antibiotics.

Overall, McDonald’s reported revenue slipped 10% to $6.5 billion, though it would have increased 1% excluding the strong U.S. dollar. Earnings were also down 10% to $1.26 per share. Those results were better than what analysts had predicted.

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