Investing.com - McDonald’s (NYSE:MCD) reported disappointing second quarter results Tuesday, with a sharp drop in overseas sales as the Covid-19 pandemic shut stores, hitting the bottom line.
McDonald’s announced earnings per share of $0.65 on revenue of $3.76 billion, while analysts had expected EPS of $0.74 on revenue of $3.7 billion.
At 7:21 AM ET (1121 GMT), shares traded 2.1% lower premarket.
"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," said McDonald's President and Chief Executive Officer Chris Kempczinski.
As of June 30, 2020, nearly all McDonald's restaurants around the world were open to serve customers.That said, global comparable sales declined 23.9% in the quarter, with same-store sales outside of American dropping 41%. The U.S. reported a comparatively healthy drop of only 8.7% in same-store sales.
"McDonald’s business outlook remains uncertain due to the economic downturn and risk of a second wave of infections. In this environment, it’s unlikely that the management can offer much visibility. Traffic at stores will continue to suffer while the food-chain will have to adjust quickly to serve customers and improve profit," said Haris Anwar, an analyst at Investing.com.
"One area which can improve the sales outlook is the chain’s ability to bring back popular menu items which were discontinued due to the pandemic. Also, revival of the chain’s all-day breakfast is crucial to revive sales."
McDonald’s shares are up 1% from the beginning of the year , still down 9.32% from its 52 week high of $221.93 set on August 9, 2019. They are outperforming the S&P 500 which is up 0.27% from the start of the year.
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