McDonald’s Corp (MCD) on Thursday announced its financial results for the fourth quarter that fell short of expectations, as renewed lockdowns in certain parts of Europe weighed on its sales. Many European countries reimposed restrictions late last year due to the resurgence in the pandemic cases that negatively impacted the company’s earnings.
The Chicago, Illinois-based company said the restrictions affected its business in the international markets. The company does not expect its margins to return to the pre-pandemic levels at least in 2021.
McDonald’s reported earnings of $1.38 billion, or $1.84 p.s. for roughly three months ended December 31, as compared to $1.57 billion, or $2.08 p.s. in the same period last year. On an adjusted basis, the company earned $1.70 per share, down 14 percent from the year-ago quarter, and below the consensus forecast of $1.77 per share.
Revenue for the quarter came in at $5.313 billion, missing the analysts’ average estimate of $5.362 billion. Global comparable sales declined 7.4 percent during the quarter mainly due to operating hour restrictions in areas with more intense Covid-19 crisis. Analysts were expecting a drop of 5.03 percent. On the bright side, comparable sales in the U.S. jumped 5.5 percent, beating the expectations of a 5.15 percent surge.
The CEO of McDonald’s – Chris Kempczinski said: “2020 will be remembered as one of McDonald’s most challenging, yet inspiring, moments in our long history. The resilience of the company’s system was on display. Making safety and service a priority, putting our customers and people first, and running great restaurants”
Looking forward, the company expects its revenue to grow in the low double digits in the current fiscal year, saying the increase in the home market will not be enough to balance the weak growth in the international markets.
McDonald’s shares traded nearly flat after releasing its quarterly results. Overall, MCD stock has not gained any value over the past year.