Image source: McDonald’s
By Nivedita Balu and Hilary Russ
(Reuters) – McDonald’s Corp missed Wall Street estimates for quarterly profit and revenue on Thursday as a second round of pandemic lockdowns in parts of Europe hurt its business and countered the hamburger chain’s sales growth in the U.S. market.
Several European countries announced tough restrictions as the health crisis spiraled out of control late last year, adding to the woes of the restaurant industry, which was already reeling from the impact of the COVID-19 for much of the year.
McDonald’s said the restrictions were affecting markets abroad, particularly those with fewer drive-thru locations, and that it was expecting some of them to remain as long as the pandemic’s vice-like grip on the world continued.
Comparable sales for the restaurant chain’s international operated markets segment fell 7.4% in the fourth quarter, largely due to weakness in France, Germany, Italy and Spain, where the health crisis has been more intense.
Analysts had forecast a drop of 5.03% for the segment, according to IBES data from Refinitiv.
Comparable sales in the United States, however, rose 5.5%, an improvement over the prior quarter and better than the estimate of a 5.15% increase, as the company leaned on its drive-thrus and celebrity collaboration, including the launch of the crowd-favorite Travis Scott Meal, to drive its business.
Overall, global comparable sales fell 1.3% for the quarter, ended Dec. 31, better than the anticipated 1.46% decline and an improvement over the previous quarter, when global sales dropped 2.2% year over year.
Total revenue fell 2.1% to $5.31 billion, missing the estimate of $5.37 billion.
Excluding one-time items, the company earned $1.70 per share, missing the average analyst estimate by 8 cents.
Shares of the world’s largest fast-food chain rose slightly in trading before the opening bell.
Reporting by Nivedita Balu in Bengaluru; Additional reporting by Hilary Russ in New York; Editing by Anil D’Silva and Steve Orlofsky.