McDonald’s takes a financial hit from Covid-19 lockdown

The burger giant is still operating drive-through services in some markets.

Global lockdown orders have taken a bite out of McDonald’s first-quarter sales.

Although most restaurants in the US and China are available for drive-through and deliver, the burger giant said its sales fell 6% to $4.71bn in the January-March period.

Declines have persisted in April.

Approximately 75% of the fast food giant’s 39,000 stores globally are open.

Out of Service kiosks at a McDonalds restaurant which remains closed at the Strensham Services on the M5 motorway in Worcestershire (David Davies/PA)

But stores remain closed in some key markets like France, the United Kingdom and Italy.

McDonald’s started the year strongly.

Through February, its same-store sales, or sales at stores open at least a year, were up 7.2% worldwide and 8.1% in the US.

But sales tumbled in March as global lockdowns took hold.

McDonald’s ended the quarter with same-store sales down 3.4%.

McDonald’s said earlier investments in digital ordering and delivery have helped it weather declines in in-store traffic.

Around 25,000 McDonald’s worldwide now offer delivery, while 20,000 let customers order and pay on their mobile phones.

An employee wears a mask to serve customers at a McDonald’s drive-thru near Dover in Kent (Gareth Fuller/PA)

Chicago-based McDonald’s said its first-quarter earnings fell 17% to $1.11bn or $1.47 per share.

That fell short of the $1.57 per share that Wall Street forecast, according to analysts polled by FactSet.

The company shored up its finances in March by raising $6.5bn in debt markets.

It also plans to conserve cash by reducing the number of new restaurant openings this year.

McDonald’s has withdrawn its 2020 financial guidance and its long-term outlook.