Transcript for McDonald's Customers Not Lovin' It
Okay. It is Friday January 23 markets here open and remember this morning six point 57 billion that's. Is McDonald's revenues from the last quarter. It's a big number indeed but it is down from the same period last year by over a hundred million. And profits. That's down point 2% from last year. Sales dipping across the franchise from here to Europe to Asia. Everyone down Cutler in New York with details on it in a challenging quarter for McDonald's is Mike Santelli. Finance and Mike McDonald. Really had a tough time last year in the years wealthy entire year 2014 what we're so the reasons behind. Yeah I mean they really do face a very long term challenges it really wasn't just a blip about this quarter even 2014. Is the seventh consecutive quarter that McDonald's has missed. On revenue forecast to the big problem is obviously. Less traffic in the stores less customer interest in exactly what McDonald's has to offer which is seen is a very generic low priced fast food option rest of the world not growing very well and they now face a stronger US dollar so they're big business in Europe. And Asia all of a sudden he's challenged because you translate that back into US dollar profits doesn't look as good so all those things have been challenges for McDonald's they haven't really fashioned. Much of a strategy to attack those those difficulties. At least in a way that's persuaded Wall Street that they figured it out. OK so you've got sales down you've got profits down as well but shares actually higher today right what's. The eight yeah OK explain that. Well I think expectations have been so low they've really been beaten down. On Wall Street for McDonald's and there was a little bit of a bright spot in terms of domestic same store sales they do they were not as bad as expected. That might be a glimmer of hope that may be the slide is as a lease stalled right now. Within the US and a do you think at some point a lot of investors are looking at this big blue chip stock that's in the Dow. The industrial average and as I've pretty good dividend yield and they want to look for a reason to think that it might actually recovered might be turnaround candidate I don't think they're seeing it really in in terms of the CEO strategy or really in growth in the rest of the world but they are seeing glimmers that may be they've arrested the decline a little bit. Host McDonald's doing as far as competing in the fast casual business and I you bet your poll is of the world. That are out there really gaining more of the market share but McDonald's what's their strategy to they have when then to even go up against that I mean it's a slightly different model. Well it's actually kind of radically different if you consider that you know that the chipotle average. Sales ticket is twice what it is a McDonald's McDonald's basically you know five dollar meals is kind of they're. Their bread and butter so to speak in their customer base expects that they expect that kind of cheap. Value proposition people going back frequently whereas it's a pro lake port shake shack which is going to be going public relatives into very small change but these kind of higher and or slightly. Better burger chains as they call them are definitely getting more market share it's not really eating into a huge percentage of McDonald's business but at the margins. I do you think there's a sense out there that you know it McDonald's has less healthy food it's a less interesting experience and it you know on the business for McDonald's has a tough time because of course minimum wage being increased in a lot of states and they are very much exposed to having higher labor costs. OK so with which eyewitness internationally then I mean the sales were hit it badly in Asia because that meat scandal. Is that a one time thing as a company where you sort of bounce back from about. If it's a one time thing until the next ones just tell how yes it's a onetime thing in the sense that this is not that particular. Episode isn't going to carry over into 2015 and a big way. But I do think they have had persistent problems at least recurring problems not just McDonald's. Every international food prepare in China is specifically has had issues with exactly you know occasionally having these sort of tainted meat. Type scandals so to speak site I do think it's something you have to be alert for but that's not going to be I think. A story for how you know Wall Street views McDonald's or US customers to read it. And yet billions and billions served Mike said Tucker Yahoo! finance Mike thank you have a good weekend to thank you. You of course can keep up the latest headlines right here on abcnews.com. If you've been watching the big number and Dan where New York.
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