April 22 - Profits fell at McDonalds, and sales in the U.S. were down even more than forecasts. The fast food giant blamed the harsh winter weather, but also admitted to some missteps. Bobbi Rebell reports.
The winter freeze even hit the Golden Arches. McDonald's reporting lower first quarter profits. Mickey D's blaming the severe winter weather along with, in their words, challenging industry dynamics, for their earnings miss. Sales fell 1.7 percent in the U.S.- below forecasts. In fact, it's been a really bad two years for McDonalds. They've been hurt by the bad economy, and more competition. Add to that some big missteps, like overly complicated menus and slow services and the harsh reality that fewer customers are coming in. Morningstar Analyst R.J. Hottovy says there were no major surprises but added: "Negative traffic still a concern, but positive comparable expectations for April are encouraging. Slightly better margins than expected, with much of the credit going to Europe. Earnings per share below expectations, but there might have been some one-time issues in the non-operating expense line to drive the results." And it's the global numbers that are the bright spot. Global sales rose half a percent last quarter, where European results were better than forecasts. And McDonalds' CEO says he expects comparable sales in April to be modestly positive. The stock has been basically flat for the last year.