McDonald’s takes a financial hit from Covid-19 lockdown
Global lockdown orders have taken a bite out of McDonald’s first-quarter sales.
Although most restaurants in the US and China are available for drive-through and deliver, the burger giant said its sales fell 6% to 4.71 billion US dollars in the January-March period.
Declines have persisted in April.
Approximately 75% of the fast food giant’s 39,000 stores globally are open.
In China, where 25% of stores were closed in February, nearly all have reopened; 99% of US stores are open as well, offering limited menus and takeout food.
But stores remain closed in some key markets like France, the United Kingdom and Italy.
McDonald’s started the year strongly.
Through February, its same-store sales, or sales at stores open at least a year, were up 7.2% worldwide and 8.1% in the US.
But sales tumbled in March as global lockdowns took hold.
McDonald’s ended the quarter with same-store sales down 3.4%.
McDonald’s said earlier investments in digital ordering and delivery have helped it weather declines in in-store traffic.
Around 25,000 McDonald’s worldwide now offer delivery, while 20,000 let customers order and pay on their mobile phones.
In the US, drive-through already made up two-thirds of McDonald’s sales before the Covid-19 pandemic.
Chicago-based McDonald’s said its first-quarter earnings fell 17% to 1.11 billion dollars, or 1.47 dollars per share.
That fell short of the 1.57 dollar per share that Wall Street forecast, according to analysts polled by FactSet.
The company shored up its finances in March by raising 6.5 billion US dollars in debt markets.
It also plans to conserve cash by reducing the number of new restaurant openings this year.
McDonald’s has withdrawn its 2020 financial guidance and its long-term outlook.