Fast food chain McDonald’s quarterly profits have taken a dive by 68 per cent, the lowest level in 13 years.
The major dip in profits was heavily influenced by the global coronavirus panemic which forced McDonald’s to close thousands of its restaurants across the globe.
Net income in the three months to June plunged 68 per cent from the same period a year ago to $484m ($AU674m), as coronavirus pushed up costs while causing sales to dive.
McDonald’s also offered over $200m ($AU278m) in financial support to its franchises in the quarter, adding $45m to its reserves for bad debts.
However, things are looking up for the chain with the group saying business is picking up and revenues in the US are back to normal levels this month.
The vast majority of McDonald’s restaurants are now open, although most are drive-through, delivery and takeaway only. Seating is available in only about 2,000 US outlets, roughly 15 per cent of the total.
The chain’s quarterly net income was the lowest it’s been since 2007.
“The threat of Covid-19 continues to depress consumer sentiment and the vagaries of the pandemic create an unpredictable operating environment,” said Chris Kempczinski, McDonald’s chief executive.
Performance is also returning to a more stable rate of McDonald’s in Australia and Japan, where sales are stronger than they were in 2019.
In Australia, McDonald’s deliveries have risen over the last few months and now makes up 10 per cent of total local sales.
Kempczinski said: “It’s time for us to get back on the front foot,” Mr Kempczinski said. “But it also means that we’re going to be thinking about the role affordability and value can play.”
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