But the chain's new chief executive, Steve Easterbrook, said McDonald's would announce "meaningful" changes to its menu next month as part of a company-wide turnaround bid, news that sent its shares higher.

"Where we need to fix the fundamentals, we need to act - now," Easterbrook told investors on a call after the company's announcement. "I'm not looking for incremental steps."

The urgent note struck by Easterbrook underscored the lacklustre results across the board at McDonald's in the most recent quarter. The company said diluted earnings per share for the first quarter plunged 31 per cent from a year earlier, to 84 US cents, far below the $US1.06 a share forecast by analysts surveyed by Thomson Reuters. Revenue fell 11 per cent from a year earlier, to $US5.96 billion ($7.7 billion), compared with analyst forecasts of $US6 billion.

Those results, the first reported under Easterbrook, point to the significant challenges the company faces as it seeks to reverse several years of bleak sales. In its home market, McDonald's has been increasingly usurped by the likes of Chipotle Mexican Grill and bakery chain Panera, which have grown rapidly by catering to consumer tastes for customisation, speed and higher-quality ingredients.

Since taking the helm at McDonald's in March, Easterbrook has already unleashed a flurry of changes, simplifying offerings at its roughly 14,000 restaurants across the country, introducing premium sirloin burgers and promising to limit the use of antibiotics in chicken.

Easterbrook said that McDonald's was preparing to introduce more new permanent and limited-time-only items, and that finding a balance between adding to menu boards while keeping them simple enough to be replicated at its 36,000 restaurants worldwide would be critical.

"If we lurch too far one way and streamline it, we don't have enough excitement," he said. But if McDonald's leaned too much the other way, "it becomes a little frenetic."

The US market remains especially difficult for McDonald's. Comparable sales fell 2.6 per cent, and the chain attributed this to product and promotional offers not overcoming competitive pressures. Operating income in the home market dipped 11 per cent because of weak sales, as well as the costs of restructuring and closing underperforming restaurants.

McDonald's woes extend overseas, where it has suffered from supply issues and a food safety scandal in Asia, as well as the lingering effects of delays at West Coast ports that held up shipments of potatoes this year. The chain said comparable sales in the Asia-Pacific region fell 8.3 per cent, weighed down by widespread "consumer perception issues" in Japan, and sales in Europe fell 0.6 per cent.

McDonald's decided to close about 350 underperforming restaurants last quarter, primarily in the United States, China and Japan, on top of another 350 previously planned closings worldwide, the company said in its release.

That led to $US72 million in asset write-offs, part of a $US195 million dent to its operating income that also included $US38 million in restructuring charges.

McDonald's also faces rising costs. Responding to a tighter job market and to labour campaigns, Easterbrook has also moved to raise the pay of workers at the 1500 outlets it directly operates in the United States to at least $US1 above the local legal minimum wage. The decision affects only about 10 per cent of all the workers at its outlets, or 90,000 of 840,000 workers, since the bulk of the restaurants are run by franchisees. Analysts said those stores would nevertheless be pressured to raise their own wages to compete for workers.

While the wage bump is a small victory for fast-food workers, McDonald's weak sales, coupled with rising costs and demands for better service, have strained an already troubled relationship between the chain's corporate headquarters and its franchisees.

Last week, the financial advisory firm Janney Montgomery Scott released results of its latest survey of a handful of McDonald's franchisees, and said they appeared to be in a particularly foul mood.

"Their six-month outlook for the US business was the worst in the more than 11 years that I've been doing this survey," said Mark Kalinowski, the investment analyst who does the research, based on 32 respondents, who own 215 McDonald's restaurants in the United States.

"I can see where they're coming from," he said. "Sales are going down, food costs are going up, labour costs are going up, health care costs are going up - and they're being asked to invest more in the business."

Investors on Wednesday's call also questioned whether McDonald's, long known for inexpensive Happy Meals and supersizing, suffered from a wider image problem, and whether its restaurants had enough credibility to sell high-quality items like premium burgers.

Easterbrook said he believed that there was space in the market for "quality food at McDonald's prices." He said that moves like curbing antibiotic use in its chicken were already starting to bolster McDonald's credibility in a world of changing consumer tastes and sensibilities.

And its disappointing numbers have convinced many at the 60-year-old fast-food chain that it needs to move quickly to stay relevant.

"I think there's a hunger and an interest in change," he said.