Drive-thru lifting McD’s recovery
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.