McDonald's earnings drop as customer traffic falls

McDonald's reported lower quarterly earnings Thursday behind a drop in comparable sales and declining traffic in all major segments.

Earnings for the second quarter fell 13.3 percent to $1.2 billion.

Revenues dropped 9.5 percent to $6.50 billion.

Earnings translated into $1.26 per share, two cents above analyst expectations.

Comparable restaurant sales decreased globally 0.7 percent, with the chain's home market of the US declining 2.0 percent and the Asia Pacific/Middle East/Africa region falling 4.5 percent.

However, comparable sales in Europe rose 1.2 percent, driven by strong results in Britain and Germany.

Chief executive Steve Easterbrook, who was promoted to the top job earlier this year in response to slumping sales, said the company is making progress on a turnaround plan.

"While our second quarter results were disappointing, we are seeing early signs of momentum. Looking ahead to third quarter, we expect positive global comparable sales," he said.

"I am confident that we will create the transformation necessary for McDonald's to become a modern, progressive burger company delivering a contemporary restaurant experience."

Easterbrook has emphasized efforts to sell more company-owned restaurants to franchisees, restructure its international operations and cut costs.

On Thursday, McDonald’s said it would also continue with tests of all-day breakfast service and menu simplification.

Dow member McDonald’s rose 1.5 percent to $99.00 in pre-market trade.