Courtesy of Benzinga.
McDonald's Corporation (NYSE: MCD) shares slipped Tuesday after the company said China supply issues will hurt its third-quarter earnings.
The Oakbrook, Illinois, burger chain's same-store sales fell 14 percent during August in its Asia-Pacific region, and said it's "undertaking recovery strategies in order to restore customers' trust and confidence" in that region.
Sales faltered in China in July after it was reported that the Husi Food Co. unit of privately held OSI Group Inc. sold expired beef and chicken to McDonald's and separately to Yum! Brands, Inc. (NYSE: YUM). in China.
Yum said last week that same-store sales at its China operations fell 13 percent for the quarter ended August 31.
McDonald's said Monday the debacle will reduce third-quarter earnings by $0.15 to $0.20 per share for the period ending September 14. Wall Street expects earnings of $1.52 per share on revenue of $7.30 billion.
In the United States, McDonald's same-store sales fell 2.8 percent in August and the company said weak sales will narrow U.S. third-quarter margins.
McDonald's blamed the U.S. performance on sluggish industry growth in a highly competitive marketplace. The company "is addressing its service, value and menu opportunities" to boost domestic sales.
Europe's comparable sales fell 0.7 percent in August reflecting U.K. growth offset by weak performance in Russia. For the third quarter, weak consumer sentiment is expected to hurt European restaurant sales and profitability, the company said.
McDonald's is down 0.26 percent at $92.23.
