McDonald’s Q2 Earnings Prove the Pandemic Doesn’t Spare Industry Giants
McDonald’s stock is seen tumbling following Q2 earnings that didn’t match up to investor expectations.
McDonald’s earned $483.8 million, or 65 cents per share, down from $1.97 per share the previous year. Adjusted earnings were 66 cents a share, with revenue of $3.76 billion, sadly by far missing analyst expectations of 74 cents and a revenue of $3.7 billion.
To be fair, the market is ready to accept that the pandemic hits every business, so there is more to McDonald’s downfall than these disappointing figures. The report stated the company had spent $200 million for franchisees' advertisement aid, while almost $76 million had gone to supply-chain expenses and paying off unpaid bills from franchisees. Restaurant margins were down 25%.
Investors worry consumer habits are changing in light of the pandemic, and McDonald’s may not be succeeding to adapt as fast as it should. While the average check total rose in the quarter, guest counts fell drastically, and breakfast meals bled losses as the the habit of stopping for breakfast on the way to work had been eliminated for many amid remote work and high unemployment.
Needless to say, the restaurant business is generally having a tough time, but McDonald’s performance yet again proves that not even the giants are immune to pandemic effects.
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