(Reuters) - McDonald’s Corp (MCD.N) on Wednesday reported flat sales in July at established restaurants around the world, its worst performance in more than nine years and a sign that a weakening global economy was hitting discretionary spending among mainstream diners.
Analysts polled by Consensus Metrix expected a gain of 2.3 percent at restaurants open at least 13 months.
Shares of the world’s largest hamburger chain fell more than 2 percent to $87.01 in early trading.
The results marked the first time since April, 2003, that same-restaurant sales did not rise.
“We’ve grown used to seeing McDonald’s weather bad economies, so this is a bit of a surprise,” RBC Capital analyst Larry Miller said.
Just two weeks ago, McDonald’s said it had expected July same-restaurant sales to rise, but not as much as the 3.7 percent gain reported in the second quarter.
The flat result suggested that sales significantly decelerated in the days after McDonald’s issued same-restaurant sales guidance on July 23.
“Sales trends are decelerating at a quicker-than-expected pace,” Oppenheimer and Co analyst Brian Bittner said in a client note.
“It’s clear that the consumer is starting to cut back a little,” said Edward Jones analyst Jack Russo.
Analysts said that McDonald’s advertising may have missed the mark during the quarter, when calendar shifts weighed on results.
July sales in the United States and Europe were down 0.1 percent and 0.6 percent, respectively.
Analysts, on average, expected a 2.2 percent gain in the United States and a rise of 2.4 percent in Europe.
Europe just edges out the United States as McDonald’s top market for sales. Results in France and Germany - two top European markets for McDonald’s - were weak.
Same-restaurant sales from the Asia/Pacific, Middle East and Africa region were down 1.5 percent, while analysts expected a 1.4 percent gain.
After outperforming many of its fast-food rivals, the company has tough hurdles ahead, Russo said, noting it will need to post same-restaurant sales growth on top of gains last year.
Reporting By Lisa Baertlein in Los Angeles and Brad Dorfman in Chicago; Editing by Gerald E. McCormick, Jeffrey Benkoe and Dan Grebler