OAK BROOK, Ill. - McDonald's (MCD) said Monday that a key global sales metric fell 1.8 percent in January, weighed down by persistent struggles in Japan and China.
The world's largest hamburger chain said that sales at locations in the Middle East, Africa and the Asia-Pacific region open at least 13 months dropped 12.6 percent. That showing more than offset a 0.4 percent rise at U.S. locations and a comparable 0.5 percent increase in Europe.
McDonald's shares slipped in premarket trading.
McDonald's Corp. said that its performance in the segment that includes the Asia-Pacific region was hurt by broad-based consumer perception issues in Japan as well as the ongoing fallout from a food-safety scandal in China and shift in the timing of the Chinese New Year.
Last year an undercover TV report in China showed one of McDonald's major suppliers repackaging meat that was alleged to be expired. The claim has not been publicly confirmed by the supplier or the government. The plant stopped operations, and many of McDonald's restaurants in the country were left unable to sell burgers, chicken nuggets and other items. The chain's reputation took a hit as well.
Chief Financial Officer Peter Bensen said during a January conference call that McDonald's estimates it will take at least three to six more months for its business in China to return to a normalized level. The executive said Japan has taken longer to recover. Worsening perceptions are expected to hurt Japan's results for "the foreseeable future."
Meanwhile, McDonald's said that sales at U.S. locations open at least 13 months got a boost from a strong performance of its breakfast items. But it said that was offset by tough competition.
The chain is dealing with competition on a number of fronts, including convenience stores that are selling more food and smaller chains such as Chipotle that market themselves as being of higher quality.
The rise in Europe showed strength in the U.K. and Germany largely offset by softness in France and Russia.
Last month McDonald's reported a drop in its fourth-quarter earnings and sales and said that it was going to take action in 2015 to save money and bring customers back. These actions include slowing down new restaurant openings in certain markets. It's also making menu changes and looking to offer customers more options to customize their burgers and giving them multiple ways to order - whether it be at a self-order kiosk or with a mobile device.
McDonald's announced last month that Steve Easterbrook will become its new president and CEO. He will succeed Don Thompson, who will retire on March 1 after nearly 25 years with the Oak Brook, Illinois-based company. Easterbrook is McDonald's Senior Executive Vice President and Chief Brand Officer.
McDonald's has more than 36,000 locations in more than 100 countries. More than 80 percent of its restaurants globally are owned and run by independent operators.
Its stock shed 83 cents to $93.16 in premarket trading about an hour before the market open.