McDonald's Corp. (MCD) - Get Report posted weaker-than-expected first quarter earnings Thursday amid what the world's biggest restaurant group called a "dramatic change" in consumer behavior amid the coronavirus pandemic.
McDonald's said earnings for the three months ending in March were pegged at $1.47 per share, down 14.5% from the same period last year and 10 cents shy of the Street consensus forecast. Group revenues, however, rose modestly, to $5.02 billion and topped analysts' estimates even as comparable store sales fell 3.4% amid 'dramatic changes' in consumer behavior due to the COVID-19 pandemic.
McDonald's said system wide sales fell 4% over the quarter, but didn't start declining until the second half of March, as lockdown orders and business closures shuttered the global economy and limited services at its 39,000 worldwide restaurants. The company said it expects those trends to continue over the near term.
"Following our strong performance in 2019, McDonald's began 2020 with exceptional global momentum, and our January and February sales were reflective of that trend. Since then, the global crisis caused by the COVID-19 pandemic has significantly disrupted our business, and we continue to operate in a very challenging and unpredictable environment," said CEO Chris Kempczinski. "McDonald's has seen a lot over our 65 years and I'm confident that the actions we're taking will enable us to emerge from this crisis in a position of competitive strength."
"The determination and team spirit across the McDonald's System is evident as we continue to offer affordable, convenient food while at the same time providing for the safety of our crew and customers and continuing our legacy of supporting local communities in which we operate," he added.
McDonald's shares were marked 2.5% lower in early trading Thursday following the earnings release to change hands at $183.11 each.