McDonald’s sees profits slip as services limited amid Covid-19 crisis
The fast food chain reported a major slide in quarterly profit on Thursday due to most of its restaurants limiting their services to comply with government imposed lockdowns aimed at stopping the spread of Covid-19.
McDonald's recorded a 16.7% decline in first quarter (Q1) profit on Thursday, with the company blaming its dip in performance on the fact its restaurants have limited services to take-aways only in order to comply with government imposed lockdowns aimed at halting the spread of Covid-19.
The world’s largest fast food chain told investors that three quarters of its 39,000 restaurants around the globe were operational, with almost all of its 14,000 locations in the US still up and running.
‘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,’ McDonald’s CEO Chris Kempczinski said.
McDonald’s Q1 results: key figures
Earlier in April, the fast food company withdrew its outlook for 2020 due to uncertainties surrounding the economic impact of the Covid-19 crisis.
McDonald’s had pre-warned investors that it expected a 3.4% decline in Q1 comparable store sales, with net income forecast to fall to $1.11 billion, or $1.47 per share – down from $1.33 billion, or $1.72 per share recorded this time last year.
However, the company’s Q1 revenue managed to beat analysts’ expectations, falling 6.2% to $4.71 billion – exceeding Wall Street’s estimate of $4.65 billion, according to IBES data from Refinitiv.
McDonald’s shares stable despite disappointing Q1 earnings
Despite the disappointing set of Q1 results, the company’s share price remained stable, with the stock closing 1% higher on Wednesday, with marginal gains continuing in pre-market trading on Thursday.
McDonald’s closed at $187.82 a share on Wednesday.
How much does it cost to buy UK shares with IG?
There are three ways to ‘buy’ UK shares with IG: trading CFDs or buying physical shares. The cost will depend on which method you choose. The table below illustrates how the costs to get exposure to £10,000 of Lloyds stock, which is equivalent to 16,000 shares (quoted at 62.5p a share).
Remember, CFDs are derivatives, which come with higher risk and reward than investing.
Cost to get exposure to Lloyds stock
| CFD trading | Share trading | |
| Action | Buy 16,000 share CFDs | Buy 16,000 shares |
| Capital required to open | £2000 | £10,000 |
| Total fees | £20.88 | £16 |
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get commission from just 0.08% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
