McDonald’s is reporting its first quarterly profit since 2008 and has reduced its menu prices to offset falling sales.
The company on Thursday reported its fourth-quarter earnings that were down 7.5% from a year earlier, and it was down 12% from the same quarter last year.
The company’s profits dropped 12% to $5.9 billion, a third of what analysts had expected.
McDonald’s reported a revenue of $6.9 trillion, up 5% from $6 billion in the same period last year, and a profit of $1.6 billion, down 2% from last year’s $2.3 billion.
The profit margin for the company is 55%, up from 47% a year ago.
“McDonalds’ menu costs are down, but it’s not enough,” McDonald’s Chief Executive Steve Easterbrook said in a statement.
“Our menu prices are down because we have had to continue to improve our menu, including more delicious options.
We know that the menu is a key factor in the success of our business.”
The company has been able to keep prices down because it has lowered its prices for some of its menu items, Easterbrook told analysts in a conference call.
McDonald’s did not disclose specific menu items that it has reduced.
The restaurant chain’s chief executive said the company had a strong second-quarter performance and that it had a “better balance sheet” than it had previously.
Easterbrook, who previously served as CEO of McDonald’s parent company KFC, has been criticized for slowing the company’s growth and for his focus on growth-minded marketing, which has included making new menu items and marketing them through other outlets.
McD’s shares fell as much as 8.4% to close at $45.11 on Thursday, after trading down 5% in early trading.
Shares of McDonalds were down 8.3% in midday trading on the Nasdaq.
The news comes just days after the company announced it was reducing its workforce by 4,500, cutting back on its spending and expanding the number of restaurants in the U.S.
The chain plans to hire 3,500 workers to meet its demand for more restaurants.
The cuts were announced last week, with the first full-time hires due in December.
The CEO has said that the company needs to focus on growing the number and variety of locations in the country.
The U.K. restaurant chain is also facing growing competition from fast-casual chains like Chipotle, and some analysts are warning that the market may shift away from fast food in the coming years.