By Micah Maidenberg

 

McDonald's Corp. said sales among its existing base of restaurants in the U.S. were hit hard in March as the coronavirus spread and the economy shut down.

The hamburger chain on Wednesday said same-store sales, or those from restaurants open at least 13 months, increased in January and February in the domestic market, but then fell 13.4% in March as elected officials issued guidelines requiring dining rooms to close and consumers stayed home.

Overall, comparable sales gained 0.1% in the U.S. for the first quarter, but dropped 3.4% globally.

As of today, 99% of its restaurants in the U.S. are offering at least some service, such as delivery, carry out or meals via drive-through windows, the Chicago-based company said.

But locations overseas have been forced to close, including in France and Italy. In Brazil, 60% of restaurants are operating. Globally, 75% of stores have at least limited service, according to the chain.

"There will be more challenges and difficult business decisions to be made," McDonald's Chief Executive Chris Kempczinski said.

So far, the company's supply chain for food, packaging and other items hasn't seen disruptions, Mr. Kempczinski said.

McDonald's withdrew its financial forecast for 2020 on Wednesday, citing uncertainty caused by the coronavirus. It also said it expects to reduce capital spending by about $1 billion for the year in part because the company won't open as many new restaurants in most markets.

The company said it has deferred cash collection of certain franchisee rent payments and royalties in almost all of the places where it operates.

Mr. Kempczinski, who became CEO of McDonald's last year, offered to reduce his base salary by 50%, while other top executives offered 25% reductions, for the period running from April 15 to Sept. 30, the company said. The board approved those cuts.

 

Write to Micah Maidenberg at micah.maidenberg@wsj.com

 

(END) Dow Jones Newswires

April 08, 2020 10:52 ET (14:52 GMT)

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