McDonalds Q2 results highlight recovery

Nicola Knight
Senior Analyst - Food-To -Go
@IGDShopperNews

Date : 29 July 2020

McDonalds announced results for the second quarter 2020 ended 30 June 2020, the period when global COVID-19 restrictions had most impact on store trading.

Summary

  • As of 30 June 2020, nearly all McDonald’s restaurants around the world were open to serve customers
  • Total revenue fell from US$5,409.8m in 2019 to US$3,761m in 2020
  • Systemwide sales decreased 24%
  • Operating income declined from US$2,273.9m to US$961.1m
  • Global like-for-like (LfL) sales declined 23.9% (+6.5% in 2019)
  • The US, International Operated Markets segment and global monthly LfL sales sequentially improved throughout the second quarter

Sales in all markets improved each month from April as governments released restrictions. In the US, LfL sales in June were just 2.3% down on 2019 compared to 19.2% down in April, with breakfast being the most affected daypart.  In International Operated Markets the impacts of restrictions had a greater impact, mainly driven by temporary restaurant closures in France and the UK.  This market saw sales decline by 66.7% at the peak of lockdown in April, but this improved to 18.4% down in June. LfL sales were positive in Australia in May and June driven by strong drive-thru performance. International Developmental Licensed Markets were slowest to recover as restaurant restrictions continued, most notably in Latin America.

McDonald’s President and Chief Executive Officer Chris Kempczinski commented:

“Throughout our history, McDonald's has demonstrated the strategic foresight necessary to position our business for the future. Our strong drive-thru presence and the investments we've made in delivery and digital over the past few years have served us well through these uncertain times. We saw continued improvement in our results throughout the second quarter as markets reopened around the world.

We're confident that the strong foundation we’ve built, combined with the unique advantages of our System, position us well to continue operating successfully during this pandemic and emerge even stronger.

Snapshot of McDonalds restaurants at the end of Q2

U.S.:

  • 99% of restaurants operating drive-thru, delivery, and/or take-away with a limited menu. Limited hours also applied
  • About 2,000 restaurant dining rooms reopened with reduced seating capacity

International Operated Markets: 

  • 94% of restaurants open with all markets operating with drive-thru and delivery (where available) with limited menus and hours
  • Some markets operating take-away and/or dine-in with reduced seating capacity

International Developmental Licensed Markets:

  • 94% of restaurants open
  • China and Japan operating with reduced seating capacity for dine-in
  • Latin America was the geography with the most restaurants closed
     

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