McDonald's says it will cut capital spending and open fewer restaurants in its most challenged markets. Fred Katayama reports.
McDonald's didn't get any break in the latest quarter. Fewer people visited its restaurants, driving profit down 21 percent. Comparable store sales fell around the world. Younger consumers are opting for healthier alternatives at places like Chipotle, and McDonald's is also coming under attack from privately held burger chains like Five Guys and In-N-Out. And it is still suffering from the supplier scandal in China that has slammed sales in Japan as well. Operating income in Asia slid 44 percent. CEO Don Thompson said, "Our business continues to face meaningful headwinds." The company says results will remain pressured, especially in the first half of the year. McDonald's says it will cut capital spending and open fewer restaurants in its most challenged markets. It's working on cutting items from its huge menu and customizing tastes for local audiences, serving cheese quiches in Brazil and red bean pies in Hong Kong. McDonald's revenue and profit widely missed analysts estimates. But the drop in same store sales was less than expected. Its stock, which has fallen 4 percent over the past 12 months, rose in early trading.