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McDonald’s stock drops after profits go wrong

McDonald’s Corp. MCD,
+ 1.27%
shares fell 2.1% during premarket trading on Tuesday after the fast-food giant reported second-quarter earnings that missed expectations. Net income totaled $ 483.8 million, or 65 cents per share, compared to $ 1.52 billion or $ 1.97 per share last year. An adjusted EPS of 66 cents missed the FactSet consensus at 74 cents per share. Sales of $ 3.76 billion were down from $ 5.41 billion last year, but ahead of FactSet’s consensus for $ 3.70 billion. Global comparable sales decreased by 23.9% and the US by 8.7%. FactSet’s consensus was for a comparable worldwide sales decline of 22.8%. Comparable sales improved from month to month during the quarter, with the average check increasing, although the number of guests declined, especially at breakfast, the company said. As of June 30, nearly all restaurants around the world were open, with approximately 2,000 dining rooms in the US reopened with reduced capacity due to the coronavirus pandemic. Quarterly results also included $ 200 million in support investment from franchisees. “Our strong drive-thru presence and the investments we have made over the years in delivery and digital have helped us well in these uncertain times,” said Chris Kempczinski, CEO of the company. McDonald’s shares have risen 1.8% in the past year, while the Dow Jones Industrial Average DJIA,
+ 0.43%
decreased by almost 7% for the period.