McDonald's posts rare profit miss, shares down 4%

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© Reuters. FILE PHOTO: A McDonald's © Reuters. FILE PHOTO: A McDonald’s “PLT” burger with a Beyond Meat plant-based patty at one of 28 test restaurant locations in London, Ontario

(Reuters) – McDonald’s Corp (N:) reported a quarterly profit that missed Wall Street estimates for the first time in two years as it invested heavily in sprucing up U.S. outlets and speeding up delivery, sending its shares down 4%.

The company has been battling competition in the United States, especially in the past few quarters, from rival fast-food chains that are challenging McDonald’s dominance with value meals and plant-based food options.

McDonald’s was late to the game in offering plant-based burgers, behind rivals Restaurant Brands’ (TO:) Burger King and Yum Brands’ (N:) KFC.

In a bid to reverse declining customer traffic and tackle competition, McDonald’s has been remodeling its 14,000 U.S. restaurants to include digital ordering kiosks, mobile ordering as well as pay and pickup services.

It has also been spending heavily on delivery by partnering with app-based delivery services GrubHub (N:), Uber (NYSE:) Eats and DoorDash.

Sales at U.S. restaurants open for at least 13 months rose 4.8% in the third quarter ended Sept. 30, below the 5.17% growth expected by analysts, according to IBES data from Refinitiv.

Globally, McDonald’s reported better-than-expected comparable sales growth of 5.9%, driven by strong growth in markets such as the UK and France.

Net income fell 2% to $1.61 billion, in the quarter from $1.64 billion, a year earlier.

On a per share basis, the company earned $2.11 per share missing expectations of $2.21.

Total revenue, including both U.S. and overseas operations, rose to $5.43 billion, slightly below analysts’ expectations of $5.49 billion.

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