The restaurant industry has taken a big hit due to the COVID-19 pandemic. Industry experts have projected that a significant portion of restaurants will be unable to open even after lockdown measures subside. However, others in the industry are well-equipped to weather this crisis and even thrive in it.
McDonald’s (NYSE:MCD) stock has dropped 4.3% in 2020 as of early afternoon trading on April 30. The company released its first quarter 2020 results on the same day.
McDonald’s revealed that same-store sales fell 3.4% in Q1 2020 as net sales declined 6% to $4.71 billion.
The company posted net income of $1.11 billion or $1.47 per share compared to $1.33 billion or $1.72 per share in the prior year. This fell below Wall Street estimates of $1.57 per share based on analysis from Refinitiv. The COVID-19 pandemic and its effects has made it extremely difficult to give concrete projections.
As it stands today, roughly 99% of U.S. restaurants remain open.
However, nearly all have been forced to operate drive-thru, delivery, and take-out only. There is better news on the international front. McDonald’s reported that nearly 80% of its stores are operating at full capacity in Brazil and Japan. Moreover, roughly 99% of stores have been reopened in China.
McDonald’s stock last had a price-to-earnings ratio of 23 as its stock was trading in the middle of its 52-week range. It also pays out a solid 2.6% dividend yield. The company has a tough road ahead in the near term, but there are signs of a return to normality across North America in May.
