10 Mar 2009

Drop in revenue expected at McDonald's

7:14 am on 10 March 2009

McDonald's warns that the stronger dollar and commodity costs will squeeze its first-quarter revenues.

First quarter revenues at the US fast-food chain could be at least $US600 million lower.

The BBC reports McDonald's sales remained steady in the economic downturn, due to its low prices and the ubiquity of its fast-food outlets.

It posted a 1.4% rise in sales in February, compared with a year earlier, at outlets open at least 13 months.

The small increase in sales came despite having one fewer day in February this year than in Leap Year last year. But rates of increase are substantially lower than last year.

Sales were down 0.2% in Europe compared with the year before, Leap Year.

The company said in a statement that if foreign currency rates "remain at current levels, currency translation is expected to negatively impact first-quarter revenues by at least $600 million".

Commodity cost pressures were also expected to have a "greater impact" during the first half of the year.