McDonald's says its global sales fell 2.5 per cent in July, dragged down by persistent weakness in the US and a food safety scandal in China.
The world's biggest hamburger chain said on Friday that the decline included a 3.2 per cent drop in the US and a 7.3 per cent drop in the unit encompassing Asia, the Middle East and Africa.
The results reflect what is likely to be just the beginnings of the fallout from a Chinese food scandal late last month.
A TV report at the time showed workers at one of McDonald's longtime suppliers, OSI Group, repacking expired meat.
McDonald's stopped using supplies from the plant in Shanghai, which left many of its restaurants unable to serve Big Macs, Chicken McNuggets and other items.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
The company has been working with other OSI plants to restore supplies to the affected restaurants.
Still, sales are likely to continue suffering given the sensitivities around food safety in China.
Yum Brands, which owns KFC and Pizza Hut, says it did not rely as heavily OSI and quickly cut ties with the company, but it has nevertheless seen its sales battered as well.
McDonald's Corp, which has more than 35,000 locations around the world, warned in a regulatory filing earlier this week that the scandal puts its global sales forecast for 2014 "at risk".
It had previously said it expects sales to be "relatively flat."
Back in the US, McDonald's has failed to boost sales since October amid intensifying competition and shifting eating habits.
The one bright spot in July was Europe, where sales at established locations edged up 0.5 per cent.
