Shares of McDonald's (MCD - Get Report) were down as much as 4% in pre-market trading Tuesday as it reported that same-store sales in its largest market -- the United States -- rose 1.8% from the prior year, badly missing Wall Street forecasts for a 3.2% increase. Of particular concern, same-store sales growth cooled drastically from a 5.4% increase in the first-quarter. McDonald's promised it will add additional items to its all-day breakfast menu and enhance its core items this fall in a bid to jump-start sales.
The tepid results from the fast food giant reflects a broad slowdown in the restaurant space in the second-quarter at the hands of more cautious U.S. consumers, which also tripped up names such as Starbucks (SBUX - Get Report) and Dunkin' Brands Group (DNKN - Get Report) .
"Traffic is still negative at McDonald's as the chain continues to wrestle with a Dollar Menu hangover, and prices of its premium items that are perhaps too high for perceived quality relative to chains such as Chick-fil-A or In 'N Out," wrote RBC restaurant analyst David Palmer in a note to clients ahead of McDonald's results.