People wear protective face masks outside McDonald’s in Times Square as the city resumes Phase 4 reopening after restrictions were imposed in New York City on September 18, 2020 to slow the spread of the coronavirus.
Noam Galai | Getty Images
McDonald’s reported Thursday that US sales rose 5.5% in the most recent quarter, but the coronavirus pandemic is still costing and slowing the recovery in many of its international markets.
The company’s shares fell less than 1% in premarket trading.
The company reported for the quarter ended December 31st, versus Wall Street’s expectations, based on an analyst survey conducted by Refinitiv:
- Earnings per share: $ 1.70, adjusted versus expected $ 1.78
- Revenue: $ 5.31 billion versus $ 5.37 billion expected
The fast food giant reported net earnings of $ 1.38 billion, or $ 1.84 per share, for the fourth quarter, compared with $ 1.57 billion or $ 2.08 per share a year earlier. The company reported that higher restaurant shutdown costs of $ 30 million and lower profits from restaurant business sales weighed on quarterly earnings.
Excluding profits related to the sale of McDonald’s Japan stock and other items, McDonald’s made $ 1.70 per share, falling short of what Refinitiv polled analysts had expected $ 1.78 per share.
Net sales declined 2% to $ 5.31 billion, below expectations of $ 5.37 billion. Global sales in the same store were down 1.3% but were better than the third quarter.
In the US, sales in the same business were positive for the second quarter in a row. The company’s home market saw sales growth of 5.5% in the same business. The company credited marketing investments and promotional activities, including those focused on core menu items like the Big Mac. The consumer trend to spend more per order persisted through the quarter, although traffic remained negative.
McDonald’s internationally operated markets, which include France, Germany and Australia, were the latecomers of the quarter. Sales in the same store decreased 7.4%. Resurgences of Covid-19 hit most of the segment’s markets and resulted in increased government restrictions. However, the company reported that both the UK and Australia saw positive sales growth in the same business for the quarter.
The chain’s international development license markets segment fared better. Sales in the same store only decreased 3.6% in the quarter. Japan saw strong sales growth in the same store, but it was insufficient to offset declining sales in other parts of Asia and Latin America.
Read the full results report here.
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