McDonald's to Post its First-Ever Loss

2 min read
Opinions expressed by Entrepreneur contributors are their own.

Oak Brook, Illinois--McDonald's Corp., the world's largest restaurant company, last week said it would post its first-ever loss in the fourth quarter, as it struggles to turn around its U.S. business and pulls back from expansion in some foreign markets. Including restructuring charges of about $390 million, the company said it expects to lose 5 to 6 cents a share. Most important, said analysts, comparable sales in the quarter are down, with sales at U.S. units open at least one year falling 1.3 percent in the two months ended November 30 and 1.5 percent through the first 11 months of the year. McDonald's also indicated that fourth-quarter sales are worsening, with sales in December showing poorer trends than October and November.

Additionally, there is a bulge of McDonald's franchisees nearing retirement who have been reluctant to reinvest in their stores, analysts said. The company is about to inaugurate a new program to invest up to $400 million renovating or rebuilding every McDonald's in the United States that is more than 15 years old. The company will loan franchisees money to make the improvements; if sales do not increase, franchisees do not have to pay back the loan. A similar program in Southern California and France resulted in sales growth of 1 to 3 percentage points at individual stores. -Reuters, The Wharton School of the University of Pennsylvania

More from Entrepreneur
Entrepreneur Select: A Fund For Entrepreneurs, By Entrepreneurs

Entrepreneurs require more than just money, which is why we aim to empower you, as well as act as a catalyst for value creation.

Make sure you’re covered if an employee gets injured at work by
  • Providing us with basic information about your business
  • Verifying details about your business with one of our specialists
  • Speaking with an agent who is specifically suited to insure your business
Try a risk-free trial of Entrepreneur’s BIZ PLANNING PLUS powered by LivePlan for 60 days:
  • Get step-by-step guidance for writing your plan
  • Gain inspiration from 500+ sample plans
  • Utilize business and legal templates
  • And much more

Latest on Entrepreneur