McDonald’s profit misses estimates as restaurants limit services

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(Reuters) – McDonald’s Corp (MCD.N) missed Wall Street estimates for quarterly profit on Thursday as most of its restaurants limited their services to delivery, drive-thru and take-away to curb the spread of the coronavirus pandemic.

FILE PHOTO: Yandex.Eats food delivery courier rides a scooter among plastic-wrapped tables of McDonald’s restaurant, as the spread of the coronavirus disease (COVID-19) continues, in Saint Petersburg, Russia March 28, 2020. REUTERS/Anton Vaganov

The world’s largest fast-food company said about 75% of its about 39,000 restaurants around the world were operational as of Thursday, including almost all of its nearly 14,000 restaurants in the United States.

The company said it had resumed operations in a majority of its restaurants in China, where the virus was first detected late last year, although demand remained low as consumers had not fully returned to their routines.

“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,” Chief Executive Officer Chris Kempczinski said.

The burger chain had pre-announced a 3.4% fall in first-quarter comparable store sales earlier this month, with U.S. sales rising just 0.1% powered by strong demand before the pandemic.

In March alone, global comparable sales fell 22.2%, the company had said in early April.

Shares of McDonald’s, a Dow 30 .DJI component, were marginally down before the opening bell. The stock has lost about 5% so far this year.

The health crisis, which has infected over a million in the United States and killed about 60,000, has forced government-led lockdowns, bringing dine-in businesses for several restaurants to a halt towards the end of the first quarter.

Earlier this month, McDonald’s withdrew its outlook for the year, joining other restaurant chains, citing uncertainties related to the health crisis and its impact on the global economic conditions.

Net income fell to $1.11 billion, or $1.47 per share, in the first quarter ended March 31 from $1.33 billion, or $1.72 per share, a year earlier.

Analysts were expecting a profit of $1.57 per share, according to IBES data from Refinitiv.

Revenue fell 6.2% to $4.71 billion, but were above Wall Street estimates of $4.65 billion.

Reporting by Nivedita Balu in Bengaluru and Hilary Russ in New York; Editing by Saumyadeb Chakrabarty

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