US fastfood giant McDonald’s has posted a decline in quarterly earnings as improved US sales failed to offset higher costs.

Illinois-based McDonald’s reported net income of US$470.9m, or 37 cents per share, for the second quarter to 30 June, compared to $497.5m, or 39 cents per share, a year earlier. Analysts had been expecting earnings of 37 cents a share, reported Reuters.

Total revenues rose to $4.28bn from $3.86bn a year earlier.

Chairman and CEO Jim Cantalupo said that while he was pleased with customer response to McDonald’s new products, signalling progress in the company’s US operations, he was “far from satisfied”. He added that the upturn reflected only the beginning of the company’s plan to consistently improve service and taste at all McDonald’s restaurants.