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McDonald’s said Thursday that its first-quarter earnings fell 17% as the coronavirus pandemic caused restaurants to close and sales to drop.
The company’s shares fell about 1% in pre-trade.
This is what the company reported for the quarter ended March 31:
- Earnings per share: $ 1.47
- Revenue: $ 4.71 billion
The global fast-food chain reported net first-quarter tax revenue of $ 1.11 billion, or $ 1.47 a share, down from $ 1.33 billion, or $ 1.72 a share, a year earlier.
Net sales It fell 6% to $ 4.71 billion when the company observed “dramatic changes in consumer behavior” stemming from the pandemic.
Wall Street anticipated earnings per share of $ 1.57 on revenue of $ 4.65 billion, according to an analyst survey by Refinitiv. However, it is difficult to compare the reported earnings with analyst estimates for the McDonald’s quarter, as the coronavirus pandemic continues to affect global economies and makes the impact of earnings difficult to assess.
McDonald’s reported a global decline in sales at the same store of 3.4% in the first three months of the year after home shelter orders and social distancing measures affected sales in March.
In the United States, quarterly same-store sales were nearly stable after March same-store sales fell 13.4%. The company has made adjustments to its US menu. In the US, including breakfast throughout the day, to simplify operations within restaurants. About 99% of restaurants in the US USA They are open, as of Thursday, but almost all of them are operating just to carry, deliver and carry.
In McDonald’s internationally operated markets segment, which includes France, Spain and Italy, less than half of restaurants are open. The segment recorded a quarterly sales contract at the same store of 6.9% in the quarter.
The company’s international development-licensed markets business, which includes Brazil and Japan, is doing better, with 80% of locations operating. About 99% of Chinese restaurants have reopened, but the company said demand has dropped because consumers have not fully resumed their routines before the crisis. Quarterly sales for the same stores in the segment fell 4.3%.
McDonald’s withdrew its forecast for 2020 and the long-term forecast issued in February, citing uncertainty related to the coronavirus pandemic and its impact on the economy. Previously, the chain expected high single-digit earnings growth and system-wide sales growth in the range of 3% to 5%.
To preserve liquidity, the company suspended the share buyback in mid-March. McDonald’s has also reduced its planned capital expenditures by $ 1 billion due to fewer restaurant renovations in the US. USA And a reduction in new global locations.
McDonald’s is deferring rent for three months for franchisees to lessen the financial blow from the slump in sales, but US franchisees. USA They are asking for more financial help to stay afloat during the pandemic, making their relationship with the company more difficult.
Read the full earnings report here.
