McDonald's shares plunge
Jarred investors sent McDonald's shares tumbling 13 percent Tuesday after the fast-food giant warned that third-quarter and full-year earnings would fall short of expectations.
The Oak Brook, Ill.-based hamburger giant, facing a sluggish economy in its key markets as well as increasing price competition in North America, lowered its 2002 earnings guidance and was far more cautious than expected for the final three months of its fiscal year.
McDonald's ongoing sales slump, heightened by a worse-than-expected August at its 13,100 U.S. restaurants.
Analysts viewed that as a sign that the growing scope of fast-food and casual-dining competition continues to erode McDonald's margins and market share.
McDonald's also said it will slow the pace of new restaurant openings from the 1,300 to 1,400 it planned to open this year so that it can revamp more stores and focus on improving service.
The nation's largest restaurant chain cut back 2002 earnings to $1.43 per share or more.
So far this quarter, McDonald's sales for the first two months were up 3 percent to $7.5 billion.
McDonald's share price had rebounded slightly after falling to a seven-year low of $19.89 last week. But it closed Tuesday at $18.91 in heavy trading, down $2.78.