McDonald’s reported its lowest quarterly profits in 13 years

By Ally Mauch
July 28, 2020 03:41 PM
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McDonald’s is closing 200 U.S. locations for good, the fast food company announced Tuesday.

The closings come as McDonald’s reported its lowest quarterly profits in 13 years, according to the Financial Times. The chain’s net income fell by 68% to $483.8 million

McDonald's additionally reported that revenues have fallen 30% in the second quarter and global same-store sales fell by 23.9%. While speaking to analysts, CEO Chris Kempczinski noted the novel coronavirus pandemic as a reason for the closures.

“In many markets around the world, most of notably in the U.S., the public health situation appears to be worsening,” he said, according to CNBC. “Nonetheless, I believe that Q2 represents the trough in our performance as McDonald’s has learned to adjust our operations to this new environment.”

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"I'm certainly not qualified to make any predictions around whether we're going to be in recession or not, but I'd certainly say there's a lot of warning signs out there that would suggest that the consumer sentiment and consumer concerns about the economy is negative and going in the wrong direction," he later added.

Chief Financial Officer Kevin Ozan offered more optimistic news, sharing that July sales “trended up” and he expects them to end up being “slightly positive” for the month overall.

McDonald’s is now one of many fast food chains that are struggling amid the global pandemic. Outposts of IHOP, Denny’s, Ruby Tuesday and TGI Fridays have all permanently shuttered due to hardships brought on by the public health crisis.

Though many chains are only shuttering certain locations, some have closed for good. Popular west coast chain Souplantation — also known as Sweet Tomatoes outside of Southern California — announced it will not be reopening its doors after all of its locations were temporarily shut down at the start of the coronavirus pandemic.

Le Pain Quotidien, a fast-casual bakery chain, announced it would close all 98 of its U.S. locations after filing for Chapter 11 bankruptcy protection in May, though at least 35 stores will potentially be reopened at a future date following a partial buyout by Aurify Brands.

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