Earnings

McDonald’s Reports Sales Slipped In May

McDonald's

All but 5 percent of McDonald’s restaurants are open, but that has done little to improve sales.

The fast food leader reported comparable sales have “improved sequentially” from late March through May.

But global comparable stores sales slipped last month by 20.9 percent. Any improvement McDonalds referenced in its filing with the Securities and Exchange Commission Tuesday (June 16) appears to be the fact that global sales were worse in April as they fell by 39 percent and in March sales declined by 22 percent.

Closures of its restaurants in the United Kingdom and France weighed heavily on the results, the company said. Overall, McDonald’s reported that wherever markets are open “sales trends continued to improve in May.”

The decline in comparable sales in the U.S. was not as bad. In May, sales across the country fell by 5.1 percent compared to 19.2 percent in April.

“Our strong foundation and the unique advantages of the McDonald’s System, including a high percentage of drive-thru restaurants and investments in delivery and digital, have enabled us to adapt to the changing landscape presented by the COVID-19 outbreak,” McDonald’s President and CEO Chris Kempczinski said in a statement. “I am confident in our ability to manage through the immediate challenges and emerge from this pandemic in a position of competitive strength.”

McDonald’s also reported nearly all of its restaurants continue to operate drive-thru, delivery and takeout with a limited menu. More than 1,000 of the restaurant’s dining rooms have reopened with reduced seating and about 100 stores remain closed, mostly in malls.

The chain also noted they plan to spend $200 million in marketing to speed up its recovery, a cost that will be recorded in the second quarter.

As PYMNTS reported earlier Tuesday, Kempczinski told analysts on a conference call that the numbers are likely to get worse before they improve.

“Looking at comparable sales, we expect the second quarter as a whole to be significantly worse than what we experienced for the full month of March,” he said.

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