McDonald’s global sales suffer as COVID-19 lockdowns limit operations
McDonald’s Corp reported a bigger-than-expected drop in global same-store sales and missed profit expectations Tuesday, as its restaurants were shut due to the COVID19 pandemic, limiting operations to only drive-thru and delivery.
Shares of the Chicago-based restaurant chain fell about two per cent before the opening bell.
Global same-store sales fell 23.9 per cent for the second quarter ended June 30, dragged down by big international markets including the United Kingdom, France and Latin America.
Analysts had forecast a 23.24 per cent fall, according to IBES data from Refinitiv.
In the United States, where it operates more than a third of its restaurants, samerestaurant sales fell 8.7 per cent, but were better than the anticipated 9.97 per cent fall, as most locations were able to stay open with drive-thru and delivery options.
As lockdowns eased, sales improved and losses were not as bad, providing some optimism for a measured rebound.
Restaurants have been struggling to cope with the changing dynamics and consumer behaviors around the health crisis, forcing them to simplify menus and shift largely to online and mobile orders for pickup, delivery and drive-thru.
“Our strong drive-thru presence and the investments we’ve made in delivery and digital over the past few years have served us well through these uncertain times,” chief executive officer Chris Kempczinski said.
To help drive its recovery, McDonald’s, like many other U.S. restaurant chains and retailers, said face coverings would be mandatory at its stores in the United States and employees would offer one to anyone entering without a mask.
The company said about 96 per cent of its restaurants were operating with drivethru, delivery or reduced seating capacity.
Revenue fell 30.5 per cent to $3.76 billion, but beat the estimate of $3.68 billion.
Net income fell 68 per cent to $483.8 million. Excluding one-time items, McDonald’s earned 66 cents per share, eight cents below expectations.