Tags: mcdonalds | breakfast | growth | engine

McDonald's All-Day Breakfast Push Loses Steam as Growth Engine

(AP)

Monday, 23 January 2017 10:00 AM EST

All-day breakfast is beginning to lose its novelty for McDonald’s Corp.

The fast-food giant, which began serving Egg McMuffins and other morning fare at all hours in 2015, is no longer getting as much sales growth from the change. While overall earnings beat analysts’ estimates last quarter, U.S. same-store sales fell 1.3 percent.

The slowdown from all-day breakfast leaves McDonald’s in search of its next big U.S. growth engine. The company is looking to technology, such as touch screens and mobile ordering, to help fuel domestic sales. But it’s not clear how quickly that will pay off, said Michael Halen, an analyst at Bloomberg Intelligence.

“We still don’t know where the sales are going to come from,” he said. “People are in wait-and-see mode.”

McDonald’s shares fell as much as 0.9 percent to $121.10 in early trading Monday after the results were posted. The stock had been up 3 percent last year.

The picture was brighter overseas. Globally, same-store sales rose 2.7 percent, topping the 1.4 percent gain predicted by analysts. Profit was $1.44 a share in the period, compared with an estimate of $1.41.

The company blamed its U.S. sales decrease on the “challenging comparison” with the all-day breakfast boost it got a year earlier.

Chief Executive Officer Steve Easterbrook embarked on a turnaround at the world’s largest fast-food chain when he took the helm two years ago. Expanding breakfast -- a longtime request of customers -- was a key part of the strategy, and it helped pull McDonald’s out of a domestic sales slump last year.

But the company still faces an industrywide restaurant slowdown, along with fierce competition to offer lower prices and more aggressive promotions. The breakfast change alone isn’t enough.

“It was a bad quarter in the industry,” Halen said.

 

© Copyright 2025 Bloomberg News. All rights reserved.


Companies
All-day breakfast is beginning to lose its novelty for McDonald's Corp. The fast-food giant, which began serving Egg McMuffins and other morning fare at all hours in 2015, is no longer getting as much sales growth from the change.
mcdonalds, breakfast, growth, engine
295
2017-00-23
Monday, 23 January 2017 10:00 AM
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