Starbucks Plans Delivery After Sales Fall Short

NEW YORK (AP) — After reporting disappointing quarterly sales Thursday, Starbucks said it will offer a delivery option on its mobile app in select areas of the U.S starting next year.

The Seattle-based company declined to provide more details, but has been pushing to get people to use its app as a way to build customer loyalty. It also previously said it plans to let customers across the country place orders ahead of time on their smartphone by next year, an option intended to get people in and out of stores quicker.

"We are playing offense," CEO Howard Schultz said in explaining the various steps the company is taking to adapt to changing customer habits, including their move toward online shopping and away from brick-and-mortar stores.

The delivery plans for the second half of 2015 were announced by Schultz during a conference call Thursday discussing the company's fiscal fourth quarter results. For the period ended Sept. 28, Starbucks reported sales that rose but fell short of Wall Street expectations. Global sales at established locations rose 5 percent, including in the Americas and Asia.

Starbucks Corp. is pushing aggressively into different areas as it faces more competition from fast-food chains serving specialty coffees. To boost sales of food in the afternoon, for instance, it has been revamping its sandwiches and adding new offerings like a grilled cheese sandwich that's warmed up in an oven.

This summer, Starbucks also launched its Fizzio soda drinks in the Sunbelt. But Wells Fargo analysts said in a note this week that their checks at a dozen stores in six states suggested the drinks aren't performing up to expectations so far.

In a phone interview, Chief Operating Officer Troy Alstead said the soda drinks are doing "exactly what we expected it to do," but that a national launch isn't planned for 2015. In a previous interview, Alstead had said he expected the drinks to be in much of the U.S. by the upcoming summer.

Alstead said Starbucks is instead focusing on growing its tea business. He said tea accounted for a "high single digit" percentage of sales last year, and that the company expects it to reach "well into the teens" over time.

For the quarter, Starbuckst earned $587.9 million, or 77 cents per share. Not including one-time item, it earned 74 cents per share, which was in line with Wall Street expectations, according to FactSet.

Revenue came in at $4.18 billion, short of the $4.24 billion analysts expected.

For the current quarter ending in December, Starbucks expects its per-share earnings to range from 79 cents to 81 cents. Analysts expected 83 cents per share. The company expects full-year earnings in the range of $3.08 to $3.13 per share.

Shares of Starbucks were down 4 percent at $74.04.

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Follow Candice Choi at www.twitter.com/candicechoi

If You Had A Verizon Family Plan In The 2000s, There's Some Cash Coming Your Way

Verizon agreed to a proposed settlement last week under which it would pay $64.2 million to settle claims that it overcharged customers who signed up for family plans.

Family SharePlan customers were allegedly billed for in-network calls that were supposed to be free, according to a class-action lawsuit filed in 2006 in a New Jersey federal court. Customers with that plan were also allegedly billed more than the advertised rate for additional minutes they used over their monthly allowance.

The alleged overcharges happened between 2002 and 2006, at the height of so-called "family share" plans' popularity with customers.

Under the terms of the settlement, which has yet to be approved by the court, Verizon would pay $36.7 million into a settlement fund, according to court filings obtained by Consumerist. Once lawyer fees and other expenses have been deducted -- $19.26 million alone will be paid to plaintiffs' attorneys, Law360 reports -- Verizon would pay the remaining amount in cash and bill credits to affected customers.

Verizon would then pay out another $27.5 million in the form of credits for free phone calls, the court documents state.

When asked whether Verizon had deliberately overcharged people with Family SharePlans, or whether it was merely a mistake, Peter Bezek, one of the attorneys who filed the class-action suit, said he believed it was “primarily an oversight.”

“I assume they legitimately believed in the billing practices they had,” Bezek told The Huffington Post. “Ultimately, when they were shown there were, in fact, billing problems, they acted responsibly and settled the case.”

Verizon declined to comment for this story.

Of course, we don’t make phone calls today nearly as much as we used to, opting instead to send text messages and emails. As a result, cell phone providers now offer plans with unlimited talk time, meaning this problem is unlikely to happen on a large scale again.

But just because charging for "minutes" isn't as common now doesn't mean that Verizon -- and companies like it -- won't overcharge you in other ways. Verizon and AT&T have both been accused of other types of improper billing, and have had to pay out substantial sums of money in order to make such cases go away.

Tim Cook Comes Out As Gay In Powerful Businessweek Essay

Apple CEO Tim Cook came out as gay in a powerful essay for Bloomberg Businessweek.

In the essay, published Thursday, Cook said that he has never denied being gay, but has not publicly discussed his sexuality until now: "So let me be clear: I’m proud to be gay, and I consider being gay among the greatest gifts God has given me."

He described how his sexuality has given him an acute social perspective.

Being gay has given me a deeper understanding of what it means to be in the minority and provided a window into the challenges that people in other minority groups deal with every day. It’s made me more empathetic, which has led to a richer life. It’s been tough and uncomfortable at times, but it has given me the confidence to be myself, to follow my own path, and to rise above adversity and bigotry. It’s also given me the skin of a rhinoceros, which comes in handy when you’re the CEO of Apple.

The revelation comes just days after Cook advocated on behalf of lesbian, gay, bisexual and transgender rights in his home state of Alabama.

"[Alabama is] still too slow on equality for the LGBT community," he said, per the Associated Press, while calling for laws protecting people based on sexual orientation and gender identity. "Under the law, citizens of Alabama can still be fired based on their sexual orientation. We can't change the past, but we can learn from it and we can create a different future."

Cook's sexuality has been a point of speculation for quite some time. Gawker reported that Cook was gay back in 2011 before he succeeded Steve Jobs.

Since then, Cook himself has seemingly dropped hints about his sexuality. Last year, during a speech about human rights at Auburn University Cook discussed the discrimination he faced as a young person, according to ValleyWag.

"Since these early days, I have seen and have experienced many types of discrimination and all of them were rooted in the fear of people that were different than the majority," he said.

However, since the 53-year-old had not publicly come out, the question still remained. In May, the New York Times ran a story titled "Where Are The Gay Chief Executives?" and had to subsequently clarify their definition of "openly gay." CNBC's Simon Hobbs made headlines for mistakenly saying Cook was "fairly open" about being gay during a live segment back in June.

Head over to Businessweek to read Cook's full essay.

Being A Politician Is The Scariest Job In America

Americans think being a politician is scarier than being a mortician or an infectious disease doctor. In fact, there's no job in the U.S. that workers fear more than being an elected official, according to a nationwide survey by CareerBuilder.

It's all that public speaking, rejection and accountability associated with the job that terrifies workers most.

CareerBuilder's survey, conducted by Harris Poll, asked 3,103 full-time workers nationwide which jobs they found "most frightful." Here are the top 10 scariest jobs, straight from CareerBuilder's survey:

1. Politician: There are 56,857 politicians/legislators in the U.S.
Median hourly pay: $9.89
Average salary for U.S. Senators and members of the House of Representatives in 2014: $174,0001
Scary for those who fear: Responsibility; accountability to a large number of people; rejection.

2. Microbiologist for Infectious Diseases: In general, there are 20,800 microbiologists in the U.S.
Median hourly pay: $32.61
Scary for those who fear: Germs; Ebola; accidentally leaving the hazmat suit at home.

3. Security Guard at Teen Pop Idol Concert: In general, there are 1,163,023 security guards in the U.S.
Median hourly pay: $11.62
Scary for those who fear: Getting trampled by screaming tweens.

4. Kindergarten Teacher: There are 158,084 kindergarten teachers (non-special education) in the U.S.
Median hourly pay: $24.12
Scary for those who fear: Germs; temper tantrums; shaping the minds of America’s youth.

5. Crime Scene Investigator: There are 128,432 detectives and criminal investigators and forensic science technicians in the U.S.
Median hourly pay: $35.75
Scary for those who fear: Blood; the disappointment on people’s faces when you tell them the job is nothing like it is on TV.

6. Animal Trainer: There are 32,360 animal trainer jobs in the U.S.
Median hourly pay: $12.03
Scary for those who fear: Animal attacks; allergy flare-ups.

7. Mortician: There are 27,505 mortician, undertaker and funeral director jobs in the U.S.
Median hourly pay: $22.83
Scary for those who fear: Dead bodies; silence; zombie attacks.

8. Radio, Cellular and Tower Equipment Installers and Repairers: There are 16,213 radio, cellular and tower equipment installer and repairer jobs in the U.S.
Median hourly pay: $21.59
Scary for those who fear: Heights.

9. Stand-Up Comedian: There are 37,272 jobs in the entertainers and performers, sports and related workers industry, which include comedians, in the U.S.
Median hourly pay: $16.89
Scary for those who fear: Public speaking; awkward silence.

10. Parent: There are too many parent jobs in the U.S. to count.
Median hourly pay: Not nearly enough.
Scary for those who fear: Almost all of the above fears.

CareerBuilder notes that there are 56,857 Americans working as politicians or legislators making a ghastly low median wage of $9.89 per hour, according to Economic Modeling Specialists Intl, a market research company.

A Gallup poll found that 40 percent of Americans fear public speaking. That could explain why we're so petrified of the idea of being a politician, stand-up comic, or kindergarden teacher. Also, trust in government has plummeted to an all-time low, so that may have something to do with our fear of being a politician.

Majority Of Kroger Shoppers Want Gun-Friendly Chain To Ban Guns

The cadre of mothers crusading to ban the open carry of firearms in stores has added a new poll to its arsenal.

Sixty-four percent of shoppers in states allowing gun owners to brandish their weapons in public want supermarket giant Kroger to prohibit open carry in its stores, according to the poll, commissioned by Moms Demand Action for Gun Sense In America, the increasingly powerful gun-control group backed by billionaire Michael Bloomberg.

On Wednesday, the moms plan to picket outside Kroger’s annual investor relations meeting in Cincinnati armed with a 300,000-signature petition and the poll, which was released Tuesday by the Benenson Strategy Group.

“People are now just realizing how absurd it is that someone could bring a loaded AR-15 into Kroger with them while they’re shopping,” Shannon Watts, the founder of Moms Demand Action, told The Huffington Post on Tuesday.

Moms Demand Action has already notched significant victories through powerful social media campaigns. At its urging, corporate food chains Chili’s, Sonic, Jack in the Box, Chipotle and Starbucks asked customers to leave guns at home or in the car. After a prolonged fight, during which the moms faced fierce rallies by rifle-toting open-carry advocates, the group convinced Target to announce a no-guns policy.

But the Kroger campaign marked a shift for the group toward more sophisticated tactics. Flush with cash from Bloomberg’s Everytown for Gun Safety fund, the moms rolled out campaign ads for the first time last month. Meant to jolt shoppers into realizing the absurdity of allowing assault-grade firearms in the stores, the ads juxtapose a person with an AR-15 slung around his shoulders with either a child holding an ice cream cone, a shirtless man or a teenager with a skateboard. The message: Deadly weapons are allowed at Kroger, where policy forbids these other, relatively harmless things.

One of the ads released by Moms Demand Action to pressure Kroger to ban guns.

Two radio ads, made by recording real customer service calls to Kroger, are also getting air time.

Since the moms embarked on the campaign, smaller grocers have approached the group for help drafting gun bans of their own.

Watts said her group chose the supermarket giant because of its size and visibility. Kroger operates 2,419 stores in 31 states, most of which are in the South and Midwest, regions where gun culture and the powerful National Rifle Association maintain a stronger grip than in, say, the liberal Northeast.

“We wanted to pick a campaign that would give us the opportunity, frankly, to do more brand damage by running ads,” Watts said. “They may at first sit back and allow the brand damage to occur, and then realize, ‘Oh, wait, we’re alienating most of our customer base, which is women and mothers.”

Kroger said it has no plans to change its current policy, and that it believes the Everytown is "a national political organization that is attempting to use retailers to further their agenda."

"Kroger's policy has been and continues to be to follow state and local laws and to ask customers to be respectful of others while shopping in our stores," Keith Dailey, a spokesman for the chain, wrote in an email to HuffPost. "We believe the controversial gun issue is best resolved by lawmakers, not retailers."

Though the results of the moms' new poll should be taken with a grain of salt, considering the group financed the poll, the findings indicate a desire to leave guns out of the grocery store.

A huge majority of those polled, 83 percent, said they believe Kroger has the right to prohibit guns if it so chooses. And 61 percent of shoppers who have guns in their homes say they don’t think such a policy would violate their Second Amendment rights. Most notably, 52 percent of shoppers who said they support a gun ban at Kroger keep firearms in their homes.

Open-carry activists marched through a Target location in Texas to protest the moms' early efforts pushing the retailer to ban guns.

Watts said most of the retailers that have announced no-guns rules over the last year conducted their own polls ahead of any policy changes.

But the rules aren’t always legally binding. It can be difficult for individual chains to enforce the policies, both legally and logistically, if a defiant customer decides to carry in a loaded assault rifle strapped to their back. But Watts, who has endured violent threats and brutal, misogynistic hate speech since founding the group after the massacre at Sandy Hook Elementary School, said the policies are first steps toward loosening the grip of the NRA gun culture.

“Ultimately,” she said, “businesses cannot withstand the wrath of American moms and women.”

This story has been updated with a statement from Kroger.

Lululemon Partners With Dalai Lama, Enrages Critics

Lululemon can't even donate to charity without miring itself in controversy.

The yoga-wear retailer is getting slammed after announcing a partnership this week with the Dalai Lama Center for Peace and Education. Lululemon will contribute $750,000 to the Tibetan spiritual leader's nonprofit organization over the next three years to expand education initiatives and for "researching the connection between mind-body-heart," according to the company's press release.

Some critics say the alliance is hogwash. They don't think the Dalai Lama's name should be associated with a money-making enterprise and complain he's been "hijacked" and turned into a mere corporate marketing tool.

A mob flocked to Lululemon's official blog, lighting up the comments section with accusations of hypocrisy.

"As he believes that luxuries are not necessities, you believe in $100 yoga pants," one commenter pointed out.

"It is offensive that you have sunk so low as to use the Dalai Lama and his image as part of your branding," another wrote.

"I am put-off by Lululemon’s bizarre effort to hijack the Dalai Lama for brand-building and commercial gain," a third added.

A few who spoke out against the partnership claimed not to like the Dalai Lama, with one calling him "cruel" and another calling him "greedy."

Lululemon appears to disagree. "Both organizations share a common vision for developing the next generation of compassionate leaders in the world and are committed to engaging and empowering healthy communities," the company said in its press release.

Lululemon and the Dalai Lama Center did not respond to requests for additional comment.

Lululemon has a lot on its plate. Last spring, quality control issues sparked a recall of too-sheer yoga pants. Then, last fall, co-founder Chip Wilson irked many customers when he said Lululemon's pants "don't work" for some women's bodies. Earlier this month, Lululemon managed to offend the entire city of Buffalo, New York, by making fun of its NFL team.

One commenter summarized: "Dear Lulu, your product is still in question, don’t get me wrong. Great marketing, done! Now get back to improving your product and winning clients back."

The 10 Most Livable Countries Right Now

Based on the most recent release of the Human Development Index by the United Nations Development Programme, 24/7 Wall St. reviewed the most and least livable countries. Data from the Human Development Index is based on three dimensions of human progress — having a long and healthy life, being knowledgeable, and having a good standard of living. According to the index, Norway is the most livable country in the world, while Niger is the least livable.

One factor that influences a country’s development is its income. The U.N. used gross national income in its calculation of the Human Development Index to reflect the standard of living in a country. In the most developed countries, gross income per capita is generally quite high. All of the world’s 10 most livable countries had among the top 30 gross national incomes per person. The top-rated country, Norway, had the world’s sixth highest gross national income per capita of $63,909.

At the other end of the spectrum, the world’s least developed countries typically had very low incomes. Six of these 10 least livable nations were among the bottom 10 countries by gross national income per capita. The Democratic Republic of the Congo, which had the lowest gross national income per capita in the world, at just $444 last year, was the second least developed country worldwide.

Click here to see the 10 most livable countries

Similarly, these countries also generally had extremely high percentage of their populations living on just $1.25 a day or less, adjusted for purchasing power. In the Democratic Republic of the Congo and in Burundi, more than 80% of the population lived on less than $1.25 per day.

Life expectancies, another factor considered in the Human Development Index, were also far better in highly developed nations. Switzerland, Australia, and Singapore were all among the top rated countries with life expectancies greater than 82 years for individuals born in 2013. By this metric, the United States is a relative laggard. The median life expectancy at birth in the U.S. of 78.9 years was ranked just 38th worldwide.

For individuals born in the world’s least developed nations, the average life expectancy was far lower. In all but one of these nations, a person born in 2013 had a life expectancy of less than 60 years. Sierra Leone, the fifth-lowest ranked nation, had the worst life expectancy, at just 45.6 years.

Sadly, among the factors contributing to these low life expectancies are, almost certainly, high mortality rates for infants and young children. Sierra Leone, which had the lowest life expectancy, also had the highest mortality rates for infants and children under five, at 117 deaths and 182 deaths per 1,000 live births.

Education also plays a role in determining development. In all but one of the most developed countries, residents aged 25 and older spent an average of more than 12 years in school. By contrast, in all of the world’s least developed countries, adult residents had less than four years of education on average.

The most and least developed nations also tend to be clustered geographically. Five of the 10 most developed countries are located in Europe. All of the least developed nations, on the other hand, are located in Africa, where political turmoil, health crises, and lack of infrastructure are far more common.

Despite their low scores, however, several of the world’s least developed nations have worked towards improving their economies in recent years, and their Human Development Index scores have improved as well. Mozambique is perhaps the best example. While it is still the 10th lowest rated nation, its score had risen by 2.5% per year between 2000 and 2013, faster than almost all other countries globally. Burundi’s score also rose substantially, by 2.3% per year in that time.

Click here to see the 10 least livable countries

To identify the most and least developed nations, 24/7 Wall St. reviewed the latest Human Development Index figures published by the U.N. The index included three dimensions made up of select metrics. The health dimension incorporated life expectancy at birth. The education dimension was based on the average and expected years of schooling, for adults 25 and older and newly-enrolled children, respectively. The standard of living dimension was determined by gross national income per capita. We also considered other statistics published by the U.N. alongside the index, including inequality measures, mortality measures, poverty rates, and expenditures on health and education as a percent of gross domestic product (GDP). All data are for the most recent period available.

These are the most livable countries.

Amazon's Jeff Bezos Is Still The World's Best CEO By One Measure

Jeff Bezos had a bad week.

Calls to rein in the ambitious Amazon chief executive grew loud on Thursday after the e-commerce giant reported its biggest quarterly loss in 14 years, driven by the anemic sales of its Fire Phone, the company’s first smartphone. The losses were seen as proof of Bezos’ reckless obsession with prioritizing growth over profitability. The 50-year-old tech mogul was lambasted as a megalomaniacal “Grinch” who stole Christmas from a company so bad at making money that it’s “not a real business.”

Yet, according to the November issue of the Harvard Business Review, Bezos is the best-performing CEO in the world. Despite the latest bad news, the venerable magazine stands by that assessment.

“People have bet against him over the years, and historically they’ve been wrong,” Daniel McGinn, the senior editor who profiled Bezos, told The Huffington Post on Saturday. “He definitely has a set of shareholders who have faith in him because of his ability to deliver despite a lot of doubt over the last 20 years.”

The Harvard Business Review compiled its list of top CEOs by comparing shareholder returns for S&P Global 1200 companies from each executive’s first day in office until April 30 of this year. Bezos won by a wide margin. Even if Amazon’s stock price -- which plummeted nearly 9 percent to $287.06 on Friday -- fell to $250, he still would have beaten runner-up John Martin, the CEO of biotech giant Gilead Sciences.

“He had quite a bit of leeway,” McGinn said. “He had such a big lead over everyone else.”

Amazon's stock tumbled after a disappointing earnings report on Thursday.

Profitable quarters are rare for Amazon, but the company generates strong revenues. Bezos’ strategy, which both befuddles and inspires investors, is to reinvest money to continually grow Amazon. A small online bookseller thereby became a video streaming service, a cloud-computing behemoth, a grocer and, most recently, a smartphone maker.

But the Fire Phone, unveiled in June, has flopped. A study published in August by the ad network Chitika, which measured web traffic from Fire Phones, found a paltry number of the devices were in use. In a conference call with analysts on Thursday, Amazon’s chief financial officer, Thomas Szkutak, admitted that the dearth of people buying the phone had cost the company $170 million in losses “primarily related to the Fire Phone inventory evaluation and supply commitment costs.”

“It’s not unusual for them to lose more money,” McGinn said. “It is unusual for them to miss a growth target.”

That doesn’t seem to worry Bezos, however.

“Even though we have significant revenues, we invest in so many new initiatives that in some ways we’re still a startup,” he told McGinn sometime before last week’s earnings report. “Volatility is part of being a startup.”

Bezos may be alone in thinking of the company as a nascent venture. Since going public in 1997, Amazon has grown so large and powerful that some have called it a monopoly ripe for a regulatory crackdown.

Still, even as Amazon stock takes a hit, the company is a lucrative investment by the Harvard Business Review’s methodology.

“If you could go in a time machine and go back to 1997 and you had the chance to buy stock on that day, would you do it?” McGinn asked rhetorically. “In financial terms, you’d still be many thousand percentage points ahead today.”

Amazon did not return a call requesting comment.

Brace Yourself: Ugg Season May Be Even Bigger Than Usual This Year

Each year as the temperature dips, women across the country turn to their closets and dig their Ugg boots out of hibernation. Others head to stores to score a pair of the squat sheepskin booties in preparation for a chilly winter.

This year the Ugg frenzy may be even bigger than usual. Sales at the Ugg brand rose nearly 24 percent last quarter to $417 million, compared to $337 million for the same period the year prior, parent company Deckers reported Thursday. The spike was due to higher wholesale sales, online sales and new retail store openings worldwide.

And now, Ugg is about to enter its prime season.

"With temperatures turning cold in recent weeks, sell-through of weather boots and classics have gained pace across the majority of our markets," Deckers chief executive Angel Martinez said on a conference call with analysts on Thursday.

Ugg's upcoming product lines are "as compelling as we have ever seen for the company," Sam Poser, an analyst at Sterne Agee, wrote in a note to clients on Friday. He added that Ugg's reaping the benefits of favorable fashion trends, as shoppers search the aisles for comfy clothes like stretchy leggings and oversized sweaters.

However Ugg's holidays turn out, "Ugg Season" will remain. The annual donning of the Uggs has even made its way into memes, like "Girls be like."

Meanwhile, Ugg's plan to diversify its offerings seems to be working. Ugg is now selling more items that aren't dependent on cold weather. It launched a home goods line in October, offering an assortment of sheepskin area rugs, knit pillows and floor poufs. There's also Ugg's loungewear line, a casual clothing label. On the call, Martinez said that Ugg's home and loungewear businesses are still "small but burgeoning" and early results have been "very strong." Ugg will be pushing both lines hard through the holidays.

In an attempt to tell customers Ugg sells more than just shearling boots, the brand launched an advertising campaign in August with the tagline "THIS IS UGG," featuring sketch artist Langley Fox Hemingway and New England Patriots quarterback Tom Brady.

But until those lines get bigger, Ugg remains a slave to the elements. According to a report from Nomura Securities, Deckers is the best example of a company that's exposed to weather risk, something it could never hope to control. So far, the climate has treated Deckers, which also owns footwear brands Teva and Sanuk, quite well this year.

"Despite the mild weather conditions over the last two winters, this year was more seasonably cool and snowy in many parts of the U.S., which had a substantially large impact on companies with a great deal of cold weather product including Deckers," Nomura analyst Bob Drbul wrote in the report.

Amazon Stock Tanks On Massive Loss, Disappointing Forecast

SAN FRANCISCO (Reuters) - Amazon.com Inc's sales projections for the crucial holiday quarter disappointed, and third-quarter results missed Wall Street's targets, sending the online retailer's shares 9 percent lower.

Some analysts fear that the U.S. holiday shopping season, the biggest quarter for most retailers, might turn out weaker than anticipated. The company projected on Thursday net sales of between $27.3 billion and $30.3 billion for the holiday quarter, lagging the $30.89 billion analysts had expected on average.

After an unusually busy first half of the year that saw the online retailer spend on developing everything from mobile phones and Hollywood-style production to grocery deliveries, investors were ready to see it curtail its ambitions somewhat and start delivering sustainable profits.

Instead, its third-quarter net loss widened to $437 million or 95 cents per share in the third quarter, from $41 million a 9 cents a year ago. That came in larger than forecasts for a loss of 74 cents a share.

Revenue also fell short of expectations, from a company known for consistently chalking up robust top-line growth. Net sales rose to $20.58 billion, but that lagged forecasts for $20.84 billion, according to Thomson Reuters I/B/E/S.

Shares in the company slid more than 9 percent to $284 in extended trade.

(Reporting by Deepa Seetharaman; Editing by Dave Gregorio and Cynthia Osterman)

McDonald's Profits Plunge 30 Percent

Oct 21 (Reuters) - McDonald's Corp reported a 30 percent fall in quarterly profit due to a food scandal in China and tough competition in the United States, and the world's largest restaurant chain said these factors were expected to hurt current-quarter results.

The company's shares fell 2 percent in premarket trading after it also said it expected a fall in same-restaurant sales for October.

McDonald's U.S. and global comparable sales fell by a steeper-than-expected 3.3 percent in the third quarter.

The company has been struggling in the U.S. market, where the fast food it helped pioneer is falling out of favor, with customers choosing healthier options available at chains such as Chipotle Mexican Grill.

McDonald's business in Europe, its biggest market, was hurt by issues in Russia and Germany. Sales in China, its fastest-growing market, plunged due to a supplier scandal.

"McDonald's third-quarter results reflect a significant decline versus a year ago ... by all measures, our performance fell short of our expectations," Chief Executive Don Thompson said in a statement.

Same-restaurant sales at McDonald's Asia-Pacific, Middle East and Africa (APMEA) business tumbled 9.9 percent, while those in Europe fell 1.4 percent.

Analysts on average had expected same-restaurant sales to fall 3 percent globally, 2.9 percent in the United States, 10.6 percent in APMEA and 0.3 percent in Europe, according to research firm Consensus Metrix.

McDonald's net income fell to $1.07 billion, or $1.09 per share, in the quarter ended Sept. 30 from $1.52 billion, or $1.52 per share, a year earlier.

Total revenue fell 4.6 percent to $6.99 billion.

McDonald's shares closed at $91.59 on the New York Stock Exchange on Monday. Up to Monday's close, the stock had fallen 5.6 percent this year. (Reporting by Siddharth Cavale in Bangalore and Lisa Baertlein in Los Angeles; Editing by Kirti Pandey)

Correction: A headline on an earlier version of this story incorrectly said that McDonald's sales plunged 30 percent.

Chipotle Founder Calls Competition From Fast Food 'A Joke'

Chipotle isn't concerned about competition from the fast-food industry.

The burrito chain's soaring stock price has rivals like Yum Brands, which owns Taco Bell, KFC and Pizza Hut, scrambling to cook up concepts that, like Chipotle, use high-quality, fresh ingredients.

But Chipotle founder Steve Ells doesn't see them as a threat.

"It's a joke," Ells, who serves as co-CEO, said in an interview published this week by Fast Company. "You know those guys, right?"

Chipotle's stock price (blue) has grown at a much faster rate than those of traditional fast-food rivals McDonald's (red), Yum Brands (yellow), Burger King (green) and Wendy's (indigo).

Plagued by a reputation for mystery-meat concoctions and food so chemically altered that it won't decay, behemoths like McDonald's and Taco Bell have kicked off campaigns to debunk negative perceptions of their menu items. Despite their attempts to introduce more healthful fare, Ells said, the companies are still too stuck in their ways.

"They can't change," he said. "The culture is too ingrained. Which bodes well for Chipotle."

But they can try. Earlier this year, Yum launched Banh Shop, a Vietnamese street food chain, in Dallas. In a more direct challenge to Chipotle, the company also opened U.S. Taco Co., an upscale taqueria, in Huntington Beach, California. Both restaurants use fresh ingredients, which command higher prices than typical fast food.

These 5 Scary Obamacare Predictions Were Dead Wrong

Predicting the ways in which Obamacare would fail and ruin America has been something of a cottage industry for conservative politicians and talking heads since the Affordable Care Act passed in 2010.

Sometimes the Obamacare haters resolutely held their ground even as the facts disproved their theories. This is known as "Obamacare trutherism".

So let's take a journey down Bonkers Lane and remember together some of the scariest prognostications about Obamacare that turned out to be untrue.

1. Prediction: No One Is Going To Pay For Health Insurance

What happened: Just About Everyone Paid For Health Insurance. After we learned that more than 8 million Americans signed up for health insurance on the Obamacare exchanges by April, it became hard to argue that no one would enroll. So conservatives moved on to a new theory: No one was actually gonna pay for it. The taker-class, 47 percenters who had latched on to the government teat were deadbeats who don't pay their bills, the argument went, basically. "But how many have paid??" they asked. Over and over.

House Energy and Commerce Republicans released a laughable "report" in April asserting only two-thirds of enrollees had paid premiums. Then they held a hearing about it, where health insurance company executives lined up to tell them they were were dead wrong, and the number was more like 80 percent to 90 percent.

Finally, after months of caginess, the Obama administration offered a real answer: 7.3 million enrollees were paid up as of Aug. 15. That's down from the 8 million announced in April, but still more than the 6 million the Congressional Budget Office predicted would sign up.

"Thank you for the health insurance. Here is my money." - Most people

2. Prediction: Premiums Are Going To Skyrocket!!

What happened: Premiums Went Up A Smidge. Maybe the loudest, most persistent prediction was that health insurance prices would go through the roof next year because so many sick people would sign up, and so few young people, that insurers would have to jack up prices -- maybe even by as much as 300 percent! And then a "death spiral" would begin and undermine the whole industry!

Back to reality: Forty-six percent of the people who bought plans on the exchanges said the plans were less expensive than the ones they had in 2013, according to a Henry J. Kaiser Family Foundation survey from March and April.

Thirty-nine percent of enrollees surveys did said their new plans were more expensive. These higher rates mainly affected younger, healthier people who earn too much money to qualify for tax credits to help pay for coverage. Eight-five percent of everyone who enrolled got these subsidies. And the increases were likely a one-time bump, mainly caused by rules making the insurance package better, so it isn't relevant to 2015. And yet...

"O-Care premiums to skyrocket," screamed a March headline in The Hill, which remains the only entity that uses the term "O-Care." FOX News was ON IT. Health insurance prices are going to double -- triple even. Trainwreck!

The basis for this shocking report? Anonymous quotes from "health industry officials." Which ones? Who knows! Stop asking questions. From The Hill:

“...I think everybody knows that the way the exchange has rolled out...is going to lead to higher costs,” said one senior insurance executive who requested anonymity.

The insurance official, who hails from a populous swing state, said his company expects to triple its rates next year on the ObamaCare exchange.

Color us rate-shocked! But wait -- what's that, consulting firm PricewaterhouseCoopers? The average premium increase on the exchanges next year will be 6 percent? (That's less than 300 percent, if you don't have a calculator handy.) That doesn't seem so bad, and is lower than typical increases for individual insurance policies before Obamacare.

This Is What's Up With Obamacare Premiums In 2015

Source: PricewaterhouseCoopers Health Research Institute

3. Prediction: Obamacare Is The Worst Thing To Happen To Young People Since Moms Joined Facebook

What Happened: A Lot Of Young People Are Insured, Pleasing Moms Everywhere. Young adults were urged to "burn their Obamacare cards" by right-wing outfits trying to disrupt Affordable Care Act implementation. Their argument: Obamacare is a bad deal for 20-somethings because they'd be paying a ton just so old people and sick people could go to the doctor. Millennials were better off paying the fine for violating the law's individual mandate than buying health insurance. And anyway, these "young invincibles" didn't even want health insurance (contrary to what they actually said in polls, but whatever).

Obamacare was designed to "screw" young adults, they were told. But in 2010, the law started allowing people to stay on their parents' health insurance policies until they turn 26, and in 2014 it began offering subsidized coverage to people with low and moderate incomes, which includes lots of young people just starting their careers. The result:

The Uninsured Rate

Among 19- to 25-Year-Olds

Source: Centers for Disease Control and Prevention via White House Council of Economic Advisers

4. Prediction: Obamacare Is INCREASING The Uninsured Rate!

What happened: Obamacare DECREASED The Uninsured Rate. Considering that the Affordable Care Act will spend about $1 trillion over a decade to subsidize health benefits and requires most people to get covered, this idea seems just plain silly. But that hasn't stopped politicians and others from expressing it aloud!

House Speaker John Boehner (R-Ohio) himself got in on the action, saying in March there was a "net loss of people with health insurance." Whoa if true.

All available evidence shows that the uninsured rate is down -- way down. According to Gallup, it hasn't been this low since the 1990s.

Source: Gallup

The Department of Health and Human Services and the Harvard School of Public Health concluded in a New England Journal of Medicine article that 10.3 million more people have health insurance this year than did last year.

5. Prediction: Obamacare Will Destroy The Private Health Insurance Industry

What happened: Health Insurance Companies Got A Lot Of New Business. A big part of this claim rests on exploiting public confusion about what "Obamacare" is, and ignoring the fact that private health insurance is what's being sold on the exchanges. (Not to mention that even "single-payer" Medicaid is largely contracted out to private insurance companies.)

Another component of this prediction was that the Affordable Care Act lays too many regulations on health insurers. And there are lots and lots of regulations, like the prohibition against rejecting customers with pre-existing conditions and the mandate for a guaranteed minimum benefits package, that insurers wish they didn't have to follow.

"Look at what we've done to eviscerate the U.S. health insurance industry," Rep. Marsha Blackburn (R-Tenn.) said on FOX News in April.

Yes, look. After the first enrollment period brought in more than 7 million paying customers and the promise of millions more in the future, health insurance companies grew more confident (even some of those, like Aetna, that expect to lose money on the exchanges in 2014).

How confident? There will be 248 more health insurance plans available on the exchanges for 2015 than there were this year, a net increase of 25 percent (including a few companies that bowed out) compared to the first enrollment period.

Not a photo of the U.S. health insurance industry