Shop Talk

Retailers, consumers and prices

Check Out Line: Weak euro to take bite out of McDonald’s too

Photo

mcd1Check out the weak euro’s latest victim.

McDonald’s reported better-than-expected global sales in May at stores open at least 13 months, but warned that full-year profits would be hit by unfavorable currency exchange rates, specifically calling out the euro.

 The No. 1 hamburger chain gets about one quarter of its operating income from the euro zone, and that region will result in foreign exchange rates hurting the full-year profit instead of being slightly positive as it previously forecast. However, the company said that issue would not affect second-quarter results and the European stores posted far stronger-than-expected May sales, so the real impact of the weak euro is still to come.

It’s been a mixed bag of late for McDonald’s, which recently recalled at least 13.4 million “Shrek”-themed drinking glasses in the United States and Canada due to the presence of toxic metal cadmium in the designs.

Euro worries don’t just apply to McDonald’s. Rival Burger King on Monday warned that unfavorable exchange rates, primarily related to the euro, would reduce the profit in the current quarter by 1 to 2 cents a share.

Check Out Line: Upset tummies in the food sector?

Photo

mcd1Check out sluggish results in the U.S. food sector.

Fast food giant McDonald’s and Kroger, the largest U.S. grocery chain, saw shares decline 2.5 percent and 10 percent, respectively, after reporting weak results.

McDonald’s said same-store sales at its U.S. restaurants slipped 0.6 percent in November, marking the second straight monthly decline. Following Yum Brands’ recent weaker-than-expected sales, it was the latest sign that the fast-food sector that had performed well through most of the recession was weakening.

Check Out Line: Slurping up strong sales at McDonald’s

Photo

CHINA-MCDONALDS/Check out those sales rising at fast-food giant McDonald’s.

The burger chain said its April sales at restaurants open at least 13 months rose 6.9 percent rise in April. In the U.S. alone, April same-store sales increased 6.1 percent, helped by new coffee drinks and chicken snack wraps.

Fast-food restaurants have generally held up better in the recession than higher-priced sit-down restaurants. 

  •