McDonald’s net revenue tanks 30% in the fiscal second quarter

McDonald’s (NYSE: MCD) published its quarterly earnings report on Tuesday that highlighted a 30% decline in net revenue as COVID-19 pushed its international restaurants into temporarily shutting down in the second quarter. McDonald’s said earlier this week that it will require its customers to wear masks.

Shares of the company were reported 3.6% down in premarket trading on Tuesday. At £155.43 per share, McDonald’s is currently trading around the same level at which it started the year 2020. In March, the stock had dropped to as low as £106.50 per share due to the impact of COVID-19. Learn more about swing trading.

McDonald’s Q2 financial results versus analysts’ estimates

According to Refinitiv, experts had forecast the company to print £2.86 billion in revenue in the quarter that concluded on 30^th June. In terms of earnings per share (EPS), their estimate was capped at 57.48 pence a share. In its financial report on Tuesday, McDonald’s topped the estimate for revenue posting a higher £2.93 billion in Q2. Its EPS of 51.27 pence, however, was weaker than expected.

At £375.79 million, the fast-food chain’s net income in the second quarter came in significantly lower than £1.18 billion in the same quarter last year. On a year over year basis, McDonald’s global comparable-store sales noted a 23.9% decline in the recent quarter.  

According to the San Bernardino-based company, its profit in Q2 was under pressure due to COVID-19 related expenses including £155.35 million that it spent on marketing support.

McDonald’s reopened 2,000 of its countrywide restaurants in June but had to freeze reopening in July due to an increase in COVID-19 cases again. The company had registered a 19.2% decline in its U.S. same-store sales in April that shrank to only 2.3% in June.

94% of McDonald’s international stores have resumed operations

Internationally, McDonald’s said that roughly 94% of its restaurants had resumed operations in the final few weeks of the second quarter. In the international segment for operated markets that includes the United Kingdom and France, its comparable-store sales were down by 33% in April but only 18.4% in June.

In the international segment for developmental licensed markets that includes Brazil and China, on the other hand, the company noted a decline in same-store sales from 32.3% in April to 20.3% in June.

McDonald’s same-store sales in Japan boasted quarterly growth on Tuesday. At the time of writing, it is valued at £116.23 billion and has a price to earnings ratio of 26.36.