Cutting Calories

After reporting an 11 percent drop in third-quarter profits, McDonald's Corp. (Oak Brook, Ill., fast-food restaurateur) announced it will open fewer restaurants in 2003 and invest more in its existing and sluggish U.S. restaurants.

The company said its net earnings were $486.7 million, down from $545.5 million a year earlier. The announcement was the seventh time in the last eight quarters that McDonald's has reported lower profits.

To combat its profit woes, the company said it will open 600 McDonald's restaurants worldwide next year, down from 1050 in 2002. Overall, the company said it will reduce spending on new restaurants by 40 percent to $875 million in 2003, with $750 million earmarked for new McDonald's restaurants and the rest for its other brands, including Boston Market and Chipolte Mexican Grill.

The fast-food chain attributed its poor results to declining U.S. and European sales. In the third quarter, McDonald's sales at U.S. stores open for more than a year fell 2.8 percent, while same-store sales in Europe fell 1.3 percent. Worldwide, McDonald's operates more than 30,000 restaurants.