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Tue 28th Jul 2020 - McDonald's reports global like-for-likes down 23.9% in second quarter but picture improving
McDonald's reports global like-for-likes down 23.9% in second quarter but picture improving, 96% of restaurants now reopen: McDonald’s has reported global like-for-like sales fell 23.9% in its second quarter to 30 June 2020 – the first quarter to show the full impact of the coronavirus pandemic. But the company reported an improving picture, with 96% of its restaurants around the world now reopen. Net income was down to $483.8m from $1.52bn the previous year. Most of that was driven by declines in comparable sales during the quarter, in addition to one-time expenses such as $200m in marketing support to help franchisees during the pandemic. Chief executive Chris Kempczinski said: “Throughout our history, McDonald's has demonstrated the strategic foresight necessary to position our business for the future. 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. I'm especially proud of the way the McDonald's system continues to provide a safe environment for customers and crew, building on our 65-year legacy as a responsible and reliable choice for safe food. We're confident the strong foundation we've built, combined with the unique advantages of our system, position us well to continue operating successfully during this pandemic and emerge even stronger.” US second-quarter like-for-like sales fell 8.7%. McDonald's said results sequentially improved throughout the quarter and continued to benefit from strong average transaction value. It added comparable sales and guest counts remained negative, particularly at the breakfast daypart. Substantially all restaurants were operating drive-thru, delivery, and/or takeaway with a limited menu while limited hours also applied. About 2,000 restaurants have reopened for dine-in with reduced seating capacity. Second-quarter like-for-like sales for the “international lead” segment, which includes the UK, dropped 41.4%. McDonald's said results were heavily impacted by temporary restaurant closures and limited operations, particularly in the UK and France. While comparable sales remained negative in almost all markets, comparable sales results sequentially improved throughout the quarter for all markets. Comparable sales were positive in Australia in May and June driven by strong drive-thru performance. McDonald's said all markets were operating with drive-thru and delivery (where available) with limited menus and hours. Some markets, including the UK, are operating takeaway and/or dine-in with reduced seating capacity. In the international developmental licensed segment, second-quarter like-for-like sales were down 24.2%. Results were impacted by temporary restaurant closures across nearly all geographies, most notably in Latin America. Results also reflected continued negative comparable sales in China and positive comparable sales in Japan for the quarter, McDonald's said.

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