McDonald’s has always managed to scramble through recessions Here’s a Thought! 29 July, 2020, by Vladimir Rojankovski, Senior Analyst, Grand Capital
McDonald’s has always managed to scramble through recessions posting strong financial numbers. This time was different. Wall Street expected McDonald’s to report quarterly earnings at 74 cents per share on revenue of $3.68 billion, but McDonald’s only managed to post its Q2 diluted earnings at 65 cents per share, dropping 67% from the same period a year ago and missing market estimates. As a result, McDonald’s shares fell 2.5% to $196.24 at yesterday’s market close.
Also, contributing to bad news, the fast-food chain's revenue in the past three-month period dropped 30% on an annual basis to $3.76 billion. Meanwhile, operating income plunged 58% to $961 million. The company’s global comparable sales also significantly fell by almost 24% amid sluggish demand caused by the coronavirus pandemic.
This sad story suggests there is no escape from economic slowdown, and we must rethink the entire universe of formerly considered defensive instruments.
