McDonald's: Investors not loving itJuly 22, 2013: 2:12 PM ET
You know times must be tough when McDonald's says consumers are struggling. But are diners really too stretched for the Dollar Menu, or is there something else going on?
The fast food giant said Monday that global sales and earnings rose in the second quarter, though profits fell short of analysts' expectations.
McDonald's warned that sales will be "relatively flat" in July and that results will be "challenged" in the second half of the year.
The fast food market "remains challenging and economic uncertainty is pressuring consumer spending," said McDonald's CEO Don Thompson.
Shares of McDonald's (MCD) were down nearly 3% in afternoon trading.
McDonald's tends to thrive in a down economy, so it seems strange that the company would blame "economic uncertainty" for its poor performance. U.S. same store sales, a key metric of a retailer's health, rose 1% in the quarter. Sales fell in Europe, and were weak in China, Australia and Japan.
While the U.S. economy has been growing at a sluggish pace, consumer sentiment has actually improved in recent months, suggesting that there may be other reasons behind the weakness in McDonald's numbers.
Investors on StockTwits had a few theories.
Please, can we leave Chipotle Mexican Grill (CMG) out of this? Some of us might be going there for lunch.
On second thought, maybe Whole Foods (WFM) for lunch sounds good.
Despite questions about the nutritional value of its food, McDonald's still pays a healthy dividend.
For some investors, the weaker-than-expected results shows that McDonald's has simply run out of innovative ideas to whet consumers' appetites.
Another theory suggests McDonald's is struggling with more fundamental challenges.
That's back to the innovation question. But others see a broader trend in McDonald's numbers, which came after disappointing results from another big consumer staples company.
The misses by both McDonalds and Coca-Cola shows stimulus is only working for wealthy and Wall Street $MCD
Coca-Cola reported earnings last week that met expectations but revenue fell short, and investors bailed.