Chicago / IL. (mdc) McDonald’s Corporation is providing an update on the Covid-19 impact to the Company’s operations and certain other financial related items, including comparable sales results, ahead of our quarterly earnings announcement planned for April 30, 2020.
Business Update from McDonald’s President and Chief Executive Officer, Chris Kempczinski
Following our strong performance in 2019 through execution of the Velocity Growth Plan, we began 2020 with positive global momentum. More recently, the global outbreak of Covid-19 has significantly disrupted the McDonald’s business. While we are faced with new challenges as a result, we are drawing on the strengths of our global System to manage through the crisis and position us for long-term growth.
This unprecedented situation is changing the world we live in, and we will need to adapt to a new reality in its aftermath. One thing that has not changed, however, is McDonald’s focus on protecting the health and safety of our people and our customers. We are implementing measures across markets to keep customers and crew safe, such as contactless Drive-thru and Delivery, social distancing guidelines, protective equipment for crew and enhanced hygiene and cleaning procedures.
We will continue to work with franchisees around the world to evaluate operational feasibility. We are also working closely with suppliers on contingency planning for continuous supply so that we can continue to operate safe restaurants, and I’m pleased to share that at this stage, we’ve had no breaks in supply for any food, packaging, toys or equipment globally. Additionally, we have great pride in the actions our employees, franchisees and suppliers are taking around the globe to support communities by donating medical supplies, feeding first responders and healthcare workers, and contributing food and volunteer hours to relief efforts.
While the disruption means our business is faced with immediate challenges, we believe our agility has positioned us well to adapt and continue to serve customers where it is safe to do so. Approximately 75 percent of our restaurants around the world are operational, the majority of which have adapted to focus on Drive-thru, Delivery, and/or Take-away. We are proud of McDonald’s important role in continuing to offer affordable, convenient food for those who need to continue working during this time, such as healthcare workers and other essential workers. I am immensely grateful to our employees who are safely serving that need in their local communities.
Our January and February global comparable sales were strong in most countries. Beginning in mid-March, we experienced a significant decline in our results that varies across markets. The variation reflects the different levels of consumer behavior and government response. The situation remains fluid, and as the duration and scope of Covid-19 continues to evolve, it is not possible to estimate the full extent of the impact on our business at this time.
There will be more challenges and difficult business decisions to be made. We are confident in our resilience, but we are not complacent. We remain focused on what we can control to manage through this crisis. To that end, we have taken important steps to preserve our financial flexibility, including suspending our share repurchase program and increasing our cash position by raising USD 6.5 billion in the debt markets during the first quarter. In addition, we will reduce capital expenditures this year as a result of fewer Experience of the Future projects across the U.S. and a reduced number of new restaurant openings in most markets around the world.
Our priorities remain the health and safety of our people and our customers, preserving financial flexibility, maintaining discipline and serving our communities where it is safe to do so. As we navigate through this unprecedented crisis, we will continue to operate with a long-term mindset, in order to best position ourselves for the future.
For additional information please read the following news release (PDF | 2558 KB):
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