McDonald’s Q1 Profit Down, Misses View

McDonald’s Corp. (MCD) reported a profit for the first-quarter that declined 17 percent from last year, reflecting weak sales performance due to restaurant closures, limited operations and dramatic changes in consumer behavior as a result of COVID-19. Global comparable sales declined 3.4%.

The fast-food giant said that the about 75% of its restaurants worldwide remain open to serve customers, the majority of which have adapted to focus on Drive-thru, Delivery, and/or Take-away.

The company also said it delivered strong global comparable sales results for the two months ended February 2020, with all segments benefiting from Leap Day. But, the global sales results began to decline during the second half of March due to COVID-19, which caused significant restaurant closures and “shelter-in-place” guidance.

The sales trends from the second half of March have continued into April, and are expected to continue while these restrictions are in place.

McDonald’s reported that its net income for the first-quarter declined 17 percent to $1.11 billion from last year’s $1.33 billion, with earnings per share decreasing to $1.47 from $1.72 in the previous year. Analysts polled by Thomson Reuters expected the company to report earnings of $1.57 per share for the quarter. Analysts’ estimates typically exclude special items.

Foreign currency translation had a negative impact of $0.02 on earnings per share for the quarter.

Total revenues for the quarter declined 6 percent to $4.71 billion from $5.02 billion in the prior year,while it was up 5% in constant currencies. Analysts expected revenues of $4.65 billion for the quarter.

System-wide sales decreased 4 percent or 2 percent in constant currencies.

Earlier this month, the company withdrew its 2020 Outlook and its long-term outlook due to the uncertainty related to the impact of COVID-19 on global economic conditions and the company’s business operations.

In Thursday pre-market trade, MCD is trading at $187.55, down $0.27 or 0.14 percent.

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