Shares of the company fell 12% in extended trading.

“In a highly challenged environment, this quarter’s results do not reflect the power of our brand, our capabilities or the opportunities ahead,” CEO Laxman Narasimhan said in a statement. “It did not meet our expectations, but we understand the specific challenges and opportunities immediately in front of us.”

In the U.S., same-store sales decreased 3% as traffic sank 7%. This marks the second quarter that the company’s home market has struggled. Last quarter, executives blamed sluggish sales on boycotts targeting the company due to “misperceptions” of its stance on Israel.