A man steps out of a McDonalds restaurant with sign announcing take-out service only in Hollywood, California on March 16, 2020 as the Coronavirus pandemic brings much of California to a standstill.
Frederic J. Brown | AFP | Getty Images
Citing the ongoing uncertainty brought on by the coronavirus pandemic, McDonald’s said Tuesday it may offer some franchisees rent deferrals as restaurants close or see traffic plunge.
The global fast-food giant also warned that the “negative financial impact” to its results cannot be reasonably estimated at this time because it doesn’t know the duration and scope of disruptions to its business.
McDonald’s is working with franchisees around the globe to support financial liquidity, according to a regulatory filing on Tuesday. Franchisees operate about 90% of McDonald’s restaurants globally.
In the United States, “substantially all” locations are operating with only drive-thru, takeout or delivery options, the filing said. Some locations may have limited hours.
In its international operated markets segment, most markets, like France and Canada, have limited operations. Some, including Italy and Spain, have closed all restaurants.
Operating hours for locations in the company’s international developmental licensed markets are driven by government regulations. The majority of McDonald’s restaurants in Japan are open, while 95% of its locations in China are also operating.
McDonald’s long-term forecast for earnings per share growth is in the high-single digits and systemwide sales growth in a range of 3% to 5%. The company said in late January it would add about 1,000 net new restaurants globally in 2020 and forecast global capital expenditures of about $2.4 billion.
The Wall Street Journal reported on Monday that McDonald’s was delaying construction projects across the U.S. The company did not immediately respond to a request for comment.
McDonald’s shares were relatively flat in premarket trading. The stock, which has a market value of nearly $115 billion, has fallen nearly 25% since the start of the year.