Underwhelming burger sales at McDonald's and Wendy's, beer at Coors

Underwhelming burger sales at McDonald’s and Wendy’s, beer at Coors

Burger and fast-food sales at McDonald's and Wendy's came in below expectations on Tuesday.

By Tiffany Hsu

May 8, 2012 8:33 AM PT

Sales of burgers and other fast food were less than fresh recently at McDonald’s Corp. and the Wendy’s Co., and beer revenue at Molson Coors Brewing Co. disappointed as earnings were reported Tuesday.

McDonald’s said its sales at global stores open for at least 13 months were up 3.3% in April compared to the same month in 2011, but that was less than analysts had expected.

Sales increased more than 3% in the U.S. and in Europe but had only a 1.1% boost in the Asia Pacific, Middle East and Africa regions due to weakness in Japan.

The chain has been busy perking up its menu with items such as the 20-piece Chicken McNuggets on the Extra Value Menu while also remodeling restaurants.

At competitor Wendy’s, first-quarter profit also missed expectations. The company was hit hard by higher commodity costs, especially for fresh beef, as well as by the cost of promoting its new “W” cheeseburger.

Wendy’s is in the midst of “a transition year,” said Emil Brolick, the chain’s new chief executive. Like many of its fast food rivals, the company is trying to rejuvenate the look of its restaurants while also introducing new, more premium menu offerings such as a Spicy Guacamole Chicken Club sandwich and baked sweet potatoes.

Income was $12.4 million, or 3 cents a share from a net loss of $1.4 million a year ago. But excluding certain items, earnings per share settled at 1 cent for the period that ended April 1, underwhelming analysts.

Revenue perked up 2% to $593.2 million from $582.5 million. Same-store sales in the U.S. improved by 0.8%.

But “it was not enough to offset restaurant-level margin pressure,” Brolick said in a statement. “We are allocating substantial resources toward restaurant development, marketing, product innovation and customer service initiatives.”

Wendy’s also cut its forecast for the year.

First-quarter revenue at Molson Coors Brewing Co., which produces Coors Light and Blue Moon beers, also came in under expectations with a 0.1% rise to $691.4 million.

That’s even after the company raised its prices and boosted its sales due to the unseasonably warm weather. But continuing an industry-wide trend of premium, craft-like brews outpacing traditional brands, Molson’s higher-end labels such as Leinenkugel, Creemore and Cobra grew strongly in the quarter.

The overall $79.4 million, or 44 cents a share, that Molson made in profit was down from the year-earlier figure of $82.6 million, or 33 cents a share. Excluding one-time items, Molson earned 47 cents a share.

The company also announced a raft of executive changes related to its planned $3.5-billion purchase of East European brewer StarBev. Current StarBev Chief Executive Alain Beyens will be replaced with Mark Hunter, who leads Molson’s U.K. and Ireland business. Gavin Hattersley, recently a top executive at MillerCoors, Molson’s U.S. joint venture with SAB Miller, will become Molson’s global chief financial officer.

McDonald’s posts first-quarter profit of $1.27 billion, up 5%

Molson Coors seeks European growth with $3.5-billion StarBev buy

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