McDonald's says eating-out market remains 'challenging'

McDonald's sign
Image caption McDonald's said US sales grew 1% in the three months to June

McDonald's says the "informal eating-out market remains challenging" and that this will affect its results for the rest of the year.

The comment accompanied its second quarter earnings, which missed analysts' expectations.

In the three months to June, the company earned $1.4bn (£910m), an increase from last year's $1.35bn but less than Wall Street had expected.

McDonald's said that global sales at established restaurants edged up 1%.

The report left the shares down 2.7% at the close of trading in New York.

Chief executive Dan Thompson said: "While our consolidated results this quarter were positive, 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."

Europe saw a 0.1% decline as a solid sales performance in the UK and Russia failed to offset a decline in France and Germany.

UK jobs growth

The company said that while European earnings continued to be affected by the challenging consumer environment, they drove the majority of the company's operating income growth for the period.

McDonald's UK announced it was on track to create 2,500 jobs this year, having already hired 1,500 - partly because it was opening 14 new restaurants and partly because more existing restaurants were open for longer.

"We know it's still tough out there for everyone and that's why I'm determined to maintain momentum by continuing to invest in the long-term growth of our business - our restaurants, our people and quality ingredients that are responsibly sourced - to ensure our customers enjoy a great experience at great value every time they visit," said Jill McDonald, chief executive of McDonald's UK.

US sales grew 1%, helped by the Dollar Menu and new products such as chicken wraps and egg-white breakfast sandwiches.

In the Asia-Pacific, Middle East and Africa, sales declined 0.3% - mainly owing to "negative results" in China, Australia and Japan.

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