McDonald's says its global sales dropped 30% in the first 2 months of the current quarter

McDonald’s (NYSE: MCD) announced on Tuesday that in the first 2 months of its ongoing quarter, its global sales posted a 30% decline due to the Coronavirus pandemic that has restricted people to their homes. The American fast-food company, however, has now started reopening its worldwide locations for public and hinted at a slowly recovering demand. McDonald’s registered a 17% decline in its earnings in Q1.

Shares of the company are currently more than 2% down on Tuesday. At £149.34 per share, McDonald’s is roughly 6% down year to date in the stock market after recovering from a low of £109.24 per share in March. At the time of writing, the fast-food company has a market capitalisation of £111 billion and a price to earnings ratio of 24.59.

McDonald’s reports a 21% decline in same-store sales in May

According to McDonald’s, its restaurants, especially the ones located in the United States, recorded a significant increase in demand in the past two months (April and May). Reopening some of its locations, the fast-food chain saw a 39% decline in its comparable-store sales in April while the same-store sales were only 21% down in May.

US states are now starting to ease the strict social distancing measures that were imposed in recent months to minimise the fast spread of the novel flu-like virus that has so far infected more than 2.1 million people in the United States and caused over 118,000 deaths.

During COVID-19 restrictions, the fast-food companies in the US resorted to takeaway, drive-thru, and collaboration with 3^rd party apps for home deliveries to offset the decline in sales ascribed to the temporary closure of dine-ins.   

McDonald’s prints a 5% decline in the US same-store sales

According to the company, the hardest hit to its same-store sales in the current quarter was noted in the United Kingdom, France, Italy, and Spain as all of its restaurants remained closed in April. The San Bernardino-headquartered company started reopening some of its European locations in the last week of May.

In the two months (April and May), McDonald’s printed a 12% decline in its comparable-store sales in the US. Comparable sales tanked 19% in April in the United States but the slump contracted to only 5% in May.

In a bid to boost recovery after the crisis, the burger chain announced plans of increasing its advertising expenditure by £159 million. The investment, as per McDonald’s, will be noted in Q2.