McDonald’s Shares Fall Near Two-Year Low

McDonald’s shares sunk to their lowest level since early 2013 on Monday, a day before the company was expected to report its third consecutive decline in monthly sales at established stores.

McDonald’s, the world’s largest restaurant company, is dealing with a variety of problems around the globe. Its Asian restaurants were hit with supply shortages, after safety issues uncovered in July at a key supplier in China forced the company and rivals to look elsewhere for key ingredients. In Russia, some McDonald’s locations were forced to close temporarily following mass unscheduled inspections by Russia’s food-safety watchdog. And in the United States, hundreds of workers have been taking part in nationwide protests, hoping to push McDonald’s and other fast-food chains to raise wages to $15 per hour.

Shares of McDonald’s fell 57 cents to $92.50 on Monday. Monday’s closing price appeared to be the lowest closing level for the shares since January 2013.

Oak Brook, Ill.-based McDonald’s is set to report its August sales results on Tuesday, including the closely watched comparable sales, or sales at locations open at least 13 months.

Analysts anticipate that McDonald’s global comparable sales fell 3.1 percent last month, according to Consensus Metrix.

Such a decline would mark the third consecutive month of global declines for the restaurant giant. July’s 2.5 percent decline in global comparable sales matched McDonald’s performance in June. Those are the worst comparable sales McDonald’s posted since March 2003, when its global comparable sales plunged 3.7 percent.

Analysts anticipate that August same-store sales plunged 10.1 percent in the Asia/Pacific, Middle East and Africa region; fell 2.1 percent in Europe (which includes Russia); and fell 2 percent in the United States.

The Russian watchdog has said it ordered the McDonald’s closures for sanitary reasons, but they coincided with heightened tensions over the Ukraine crisis, in which the United States and European Union have imposed sanctions on Russia. Moscow has hit back by banning a wide range of Western food imports.

In early August, the company said its 2014 sales forecast was “now at risk” of being reduced further.

Through July, McDonald’s U.S. same-store sales had fallen in eight of the past nine months.

This article appeared in print in the September 9th, 2014 edition of Hamodia.