McDonald's Sales Decline 30% In Second Quarter
McDonald’s reported a 30% decline in sales during the second quarter as compared to a year ago. Total sales were $3.77 billion and net income dropped 68% to $433.8 million, the company said Tuesday. The figures reflect the April to June period, the first full quarter of coronavirus effects in the United States.
"In many markets around the world, most of notably in the US, the public health situation appears to be worsening," McDonald's CEO Chris Kempczinski said in its earnings call. "Nonetheless, I believe that Q2 represents the trough in our performance as McDonald's has learned to adjust our operations to this new environment."
McDonald’s said some of the second quarter numbers indicated improvement as the quarter went on. U.S. same-store sales were down 19.2% in April compared to last year, but that loss improved to down 5.1% in May and 2.3% in June. Sales in July "trended up", according to Chief Financial Officer Kevin Ozan, and he expects it them to be "slightly positive" for the month.
But same-store sales outside the US fell even more and their recovery has been slower, dragging down total global same-store sales. That global figure was down 39% in April compared to last year, almost 21% in May and more than 12% in June.
McDonald's (MCD) said its drive-thru, delivery and digital options are helping to bolster its business.
The pandemic, however, has prompted McDonald’s to accelerate the closure of some restaurants slated to close in coming years. The company will close 200 locations this year, with more than half of them being in "low-volume" Walmart (WMT) locations.
Kempczinski also noted internal surveys of McDonald's customers about the year ahead are gloomy.
"I'm certainly not qualified to make any predictions around whether we're going to be in recession or not, but I'd certainly say there's a lot of warning signs out there that would suggest that the consumer sentiment and consumer concerns about the economy is negative and going in the wrong direction," he said.
Related stories:
Rancher Is McDonald’s First 'Flagship Farmer'
