McDonald's Corp reported weaker-than-expected December sales at established European and US restaurants as poor weather hurt demand, and said its food costs would rise in 2011. Shares of the world's largest hamburger chain were down about 4 cents in early trading on Monday, even as the company reported a fourth-quarter profit in line with expectations.
The company said its "grocery bill" - what it pays for some 10 different commodities needed for food preparation - is expected to rise this year 2 percent to 2.5 percent in the United States and 3.5 percent to 4.5 percent in Europe - its two largest markets.
McDonald's has used spiffed-up restaurants, value menus and new food items to steal US market share from rivals like No. 2 hamburger chain Burger King, which is now private after its sale to 3G Capital.
McDonald's said global sales at restaurants open at least 13 months rose 3.7 percent overall in December. They gained 2.6 percent in the United States, slid 0.5 percent in Europe and rose 8.9 percent for Asia-Pacific, Middle East and Africa. Wall Street had expected December same-restaurant sales to be 3.9 percent higher in the United States, up 3.4 percent in Europe and gain 5.7 percent in APMEA, according to Kalinowski. In November, McDonald's same-restaurant sales rose less than expected in the United States and Japan.
Net income in the fourth quarter rose to $1.24 billion, or $1.16 a share, compared with $1.22 billion, or $1.11 a share, in the year-earlier quarter. The profit matched what analysts polled Thomson Reuters I/B/E/S had expected.