WEAK trading in the US amid winter storms and fears of a recession have eaten into sales at fast-food giant McDonald's.
The group said sales at US outlets open at least a year were flat last month as consumers cut back on spending, heightening concerns on Wall Street, where McDonald's shares fell sharply after the announcement.
However, the firm said it remaine
d confident in its home market, and would continue its current focus of cutting prices and boosting sales of breakfast items.
In the three months to the end of December, US like-for-like sales, which strip out the impact of new restaurant openings, rose just 3.3 per cent, compared with a "double digit" rise in Europe.
Net profit, meanwhile, edged up to $1.27 billion (£640m) from $1.24bn a year earlier.
The world's largest fast-food chain also cited severe winter weather as a reason for the weakness in US sales.
On the whole, McDonald's has had a strong year, yet analysts expressed concern yesterday about the impact of a possible recession on the 2008 outcome.
RBC Capital Markets analyst Larry Miller said: "Weak US trends are likely to put some pressure on the stock until investors have a sense of whether December was a one-month (one-off] or a new trend."
Net income for the fourth-quarter amounted to $1.06 per share, up from $1 per share during the same period a year earlier.
Excluding income tax benefits of 33 cents per share, the company earned 73 cents per share, beating an average Wall Street estimate of 71 cents.
Revenues rose 6 per cent to $5.75bn from $5.45bn in the final quarter of 2006, also topping market estimates. Global like-for-like sales rose 6.7 per cent during the three months.
Despite the December weakness, McDonald's chief executive Jim Skinner said the company remained confident in its US business – its biggest market with close to 14,000 restaurants. US comparable sales have risen for 19 consecutive quarters.
"While we generate better results in a booming economy like everyone else, we've navigated through tough times before and we're confident that we can do it again," he said.
"Our strategic initiatives, anchored by McDonald's three-tiered menu of premium, core and dollar menu options, position us well to grow sales and build customer loyalty in 2008 and beyond."
He forecast that January sales would be up about 1.5 per cent.
For the year as a whole, McDonald's revenues climbed 9 per cent to $22.8bn, although profits fell 32 per cent, after a hefty one-off charge for the sale of some Latin American operations.
The group said it would begin to pay dividends on a quarterly basis.
The full article contains 462 words and appears in The Scotsman newspaper.
