McDonald’s Corp. reported fourth-quarter results that showed strength in its core U.S. market -- but also ongoing weakness in some international markets as COVID-19 continues to hamper the restaurant industry around the world.
Global same-store sales, a key indicator of restaurant performance, fell 1.3 per cent last quarter, the Chicago-based fast-food chain reported on Thursday. That’s slightly better than the 1.5 per cent decline from analysts compiled by Consensus Metrix. In the U.S., where McDonald’s has around 14,000 locations and loads of socially-distant drive-thrus, comparable sales gained 5.5 per cent, also slightly higher than the 5.2 per cent estimate, representing an acceleration from the prior period.
Revenue of US$5.31 billion just trailed projections, however, as COVID-19 resurgences and lockdowns in markets such as France, Germany and Spain hampered results. Gains in some countries, such as the U.K. and Australia, were offset by losses in others, illustrating the back-and-forth nature of a pandemic that has stubbornly refused to subside over the last year.
The year “2020 will be remembered as one of McDonald’s most challenging, yet inspiring, moments in our long history,” said McDonald’s President and Chief Executive Officer Chris Kempczinski.
Shares were little changed in pre-market trading, up less than 1 per cent.
The company said restrictions, such as limited capacity and reduced hours, have carried into 2021 in some countries and continue to affect performance. The restrictions “are impacting most of the company’s key markets outside of the U.S., particularly those with fewer drive-thru restaurant locations,” according to its earnings statement.
The coronavirus has reinforced McDonald’s model of drive thrus and low prices, which has allowed it to gain market share in the U.S. despite the upheaval. McDonald’s is also pushing to expand into technology-enhanced ordering and delivery.
Lately, McDonald’s has advertised discounts such as US$1 fries through its mobile app while adding new bakery items and promoting its breakfast menu. The company is planning to introduce a loyalty program this year.