Drive-thru lift­ing McD’s re­cov­ery

Chicago Sun-Times - - NATION/WORLD - BY DEE-ANN DURBIN AP Busi­ness Writer

Busi­ness did im­prove for McDon­ald’s through­out the sec­ond quar­ter as re­stric­tions lifted across the globe, but the fast food gi­ant faces a bumpy — and ex­pen­sive — re­cov­ery.

McDon­ald’s Pres­i­dent and CEO Chris Kem­pczin­ski said the coro­n­avirus pan­demic con­tin­ues to cause un­cer­tainty and de­press con­sumer sen­ti­ment. But he be­lieves the April-June pe­riod will be the trough in the com­pany’s per­for­mance.

“McDon­ald’s has learned to ad­just our op­er­a­tions to this new en­vi­ron­ment,” Kem­pczin­ski said Tues­day in a con­fer­ence call with in­vestors.

Of the Chicago-based chain’s 39,000 restau­rants world­wide, 96% are now open, com­pared with 75% at the start of the sec­ond quar­ter. Com­pa­ra­ble-store sales that were down 39% in April were down only 12% by June.

The re­cov­ery is un­even, how­ever. In gen­eral, stores with drive-thru win­dows are re­cov­er­ing more quickly as cus­tomers try to limit con­tact, the com­pany said. Restau­rants in ur­ban cen­ters, malls and tourist lo­ca­tions are hav­ing a harder time.

In some mar­kets, like Aus­tralia and Ja­pan, sales are al­ready run­ning ahead of 2019. Aus­tralia has seen big in­creases in de­liv­ery or­ders, which now make up 10% of sales, the com­pany said.

Last week, McDon­ald’s said it will de­lay din­ing room re­open­ings for at least an­other month and will re­quire face masks for any­one en­ter­ing its restau­rants.

Still, U.S. same-store sales con­tin­ued to im­prove through­out July and should end the month slightly pos­i­tive com­pared with a year ago. Nearly all U.S. lo­ca­tions of­fer drive-thru, and McDon­ald’s said it’s also see­ing an uptick in U.S. de­liv­ery or­ders.

McDon­ald’s said sec­ond-quar­ter net in­come fell 68% to $484 mil­lion. Shares fell more than 2% to $196.24.

Chris Kem­pczin­ski

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