McDonald’s earnings fall 17% as coronavirus leads to restaurant closures, plunging sales

McDonalds and other local stores remain shuttered due to COVID-19 at Times Square on April 13, 2020 in New York, NY.

Eduardo Munoz | Getty Images

McDonald’s is expected to report earnings before the bell Thursday.

Wall Street is anticipating earnings per share of $1.57 on revenue of $4.65 billion, based on a survey of analysts by Refinitiv. However, it’s difficult to compare reported earnings to analyst estimates for McDonald’s quarter, as the coronavirus pandemic continues to hit global economies and makes earnings impact difficult to assess.

While the pandemic has upended the entire restaurant industry, fast-food chains like McDonald’s are faring relatively better. Transactions at fast-food restaurants fell 34% in the week ended April 19, while the overall industry saw transactions plunge 36% compared with a year ago, according to data from the NPD Group.

The global fast-food chain said in early April that same-store sales shrank 3.4% during the first quarter. Its global same-store sales plunged 22% during the month of March.

McDonald’s has withdrawn its 2020 outlook and long-term forecast issued in February, citing the uncertainty related to the coronavirus pandemic and its impact on the economy. The chain previously expected earnings per share growth in the high single digits and systemwide sales growth in a range of 3% to 5%.

McDonald’s is deferring rent for three months for franchisees to lessen the financial blow of social distancing measures, but U.S. franchisees are asking for more financial relief to stay afloat during the pandemic, straining their relationship with the company. 

This is a breaking news story. Please check back for updates.