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McDonald's Sales Drop Decelerated in May

McDonald's U.S. comparable-store sales fall 5% in May.
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McDonald’s  (MCD) - Get McDonald's Corporation (MCD) Report shares rose in premarket trading Tuesday after the fast-food titan reported that sales declines decelerated in May.

The company said in a regulatory filing that comparable-store sales dropped 21% in May, compared to a 39% plunge in April.

U.S. same-store sales dipped 5% in May, compared to a 19% drop in April. In international operated markets, sales fell 41% in May, compared to a 67% drop in April. In international developmental licensed markets, sales slid 20% in May, compared to a 32% fall in April.

As for the U.S., “comparable sales results steadily improved throughout the months of April and May,” McDonald’s said.

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“However comparable sales and guest counts remained negative, particularly the breakfast day part. Comparable sales continue to benefit from strong average check growth,” the company said.

Sales suffered from the closure of restaurants around the world due to the coronavirus pandemic. Now, 95% of McDonald’s restaurants are open globally, the company said.

“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,” said McDonald’s CEO Chris Kempczinski.

Morningstar analyst R.J. Hottovy wrote in a commentary last month that despite the challenges stemming from the pandemic, “the company's technology investments, value platform, and franchisee health will allow it to sustain normalized mid-single-digit system sales growth over the longer horizon.”

McDonald’s traded at $191.96, up 1.30%. It has climbed 7% over the last three months, compared to 13% for the S&P 500.