July 22 - McDonald's profit grew but missed Wall Street expectations and the fast food giant sees a tough year ahead. Fred Katayama reports.
New products like the McWrap and Quarter Pounder toppers couldn't help McDonald's sales in the U.S. The fast food giant's second quarter profit rose four percent but missed Wall Street's expectations. Its sales at U.S. and global outlets open at least a year rose just one percent, and the world's largest restaurant operator doesn't see things getting much better. CEO Don Thompson said: "...global comparable sales for July are expected to be relatively flat. Based on recent sales trends, our results for the remainder of the year are expected to remain challenged." Americans just aren't eating out as much. It was a similar story at the parent of KFC, Yum Brands, where second quarter sales grew just 1 percent, Janney Capital Markets analyst Mark Kalinowski believes Big Mac's rival, Wendy's, could eat away at McDonald's sales with its Pretzel Bacon Cheeseburger, its best-selling new burger in a decade. He also says: "Should (McDonald's) domestic sales merely match - or even underperform - Street expectations, then we believe it will be challenging for the stock to meaningfully outperform its restaurant-stock peers and the S&P 500." McDonald's shares fell on the report. It has lagged the S&P 500, rising just 13 percent this year. Wendy's reports its results on Tuesday.