McDonald’s on Thursday reported that its U.S. same-store sales jumped to 5.5% in its latest quarter, but the coronavirus pandemic is still adding costs and slowing recovery in many of its international markets.
Shares of the company fell about 1% in premarket trading.
Here’s what the company reported for the quarter ended Dec. 31 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.70, adjusted, vs. $1.78 expected
- Revenue: $5.31 billion vs. $5.37 billion expected
The fast-food giant reported fourth-quarter net income of $1.38 billion, or $1.84 per share, down from $1.57 billion, or $2.08 per share a year earlier. The company reported that higher restaurant closing costs of $30 million and lower gains on the sales of restaurant businesses hurt profits for the quarter.
Excluding gains related to the sale of McDonald’s Japan stock and other items, McDonald’s earned $1.70 per share, missing the $1.78 per share expected by analysts surveyed by Refinitiv.
Net sales dropped 2% to $5.31 billion, falling short of expectations of $5.37 billion. Worldwide same-store sales shrank by 1.3%, but improved from the third quarter.
In the United States, same-store sales were positive for the second straight quarter. The company’s home market reported same-store sales growth of 5.5%. The company credited marketing investments and promotional activity, including those focused on core menu items like the Big Mac. The consumer trend of spending more per order stayed true during the quarter as well, although traffic remained negative.
McDonald’s international operated markets, which includes France, Germany and Australia, was the laggard of the quarter. Its same-store sales fell 7.4%. Resurgences of Covid-19 hit most of the segment’s markets, leading to increased government restrictions. However, the company reported that the United Kingdom and Australia both reported positive same-store sales growth for the quarter.
The chain’s international developmental licensed markets segment fared better. Its same-store sales fell just 3.6% in the quarter. Japan showed strong same-store sales growth, but it wasn’t enough to offset declining sales elsewhere in Asia and Latin America.
In 2021, McDonald’s is expecting systemwide sales growth in the low double digits, excluding any foreign currency changes. New restaurant units are projected to contribute about 1% to systemwide sales growth.
It’s expecting $2.3 billion in capital expenditures, about half of which will go toward opening nearly 500 new restaurants in the U.S. and its international operated markets.
Read the full earnings report here.
— CNBC’s Kate Rogers contributed to this report.
This story is developing. Please check back for updates.
Source: Business - cnbc.com
