McDonald's market cap, dividends, sales and earnings in 2020

  •   DEHOUI Lionel

Based in Chicago, USA, McDonald's is a fast food company. It is recognised as the leading fast food chain in the United States and worldwide. The group has more than 36,900 outlets and is present in more than 100 countries around the world. In fiscal year 2020, the company's business was impacted by the Covid-19 health crisis. This negatively impacted the group's results during the year.

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McDonald's market cap, dividends, sales and earnings in 2020
Image copyright: Mike Mozart

Performance in the first quarter of 2020

The McDonald's Group has had a difficult start to the 2020 financial year due to the Covid-19 pandemic. The Covid-19 pandemic severely affected the company's quarterly results at that time. The pandemic led to the temporary closure of the company's restaurants around the world.

In the first three months of the 2020 financial year, the fast-food giant posted sales of 4.71 billion dollars. This was down 6.2% compared to the same period in 2019. It is also worth noting that the revenue recorded by the group's franchised restaurants reached $2.6bn in the quarter, compared to $2.7bn in Q1-2019.

For the first quarter of 2020, the golden arch brand posted a net profit of $1.1 billion, compared to $1.3 billion in the same period a year earlier. At the time of that quarter's earnings release, the company estimated that about 75% of its restaurants were able to offer drive-through, take-out and delivery services.

 

Quarterly results in Q2-2020

The coronavirus health crisis continued to affect McDonald's Group's business in Q2-2020. Several of the company's restaurants were still closed in a number of countries around the world. The negative effects of the epidemic were evident in the performance of the American company during this period.

For the whole of Q2-2020, the US group's net profit was $483.8 million. This was 68% lower than at the same time last year. This underperformance reflects the decline in sales during the quarter as well as changes in consumer behaviour as a result of the pandemic.

In the April-June period, the fast-food giant posted sales of $3.7 billion, down 30% year-on-year. However, it exceeded market expectations for $3.68 billion in sales. Adjusted earnings per share for Q2-2020 were $0.66, down from $2.05 a year earlier.

This was below the market's forecast of $0.74. In addition, at the end of June 2020, almost all of the brand's restaurants were open in several countries around the world, providing at least delivery sales.

 

Q3-2020 results ahead of expectations

McDonald's Group's business rebounded in the third quarter of 2020. For the period as a whole, the US retailer's sales reached $5.42 billion, down about 2% year-on-year. However, it came in above market estimates. The market was expecting sales of 5.39 billion dollars for the quarter.

In contrast, for Q3-2020, the company reported net income of $1.76 billion (or $2.35 per share), compared with $1.61 billion (or $2.11 per share) in the same period last year. This represents an increase of 10% year-on-year. This increase was supported by the gain from the sale of part of the group's stake in its Japanese subsidiary.

In the quarter under review, the company generated earnings per share of 2.22 dollars (excluding exceptional items). This exceeded market expectations of $1.90. In the US, the group saw like-for-like sales growth of 4.6% in US restaurants in Q3-2020.

In addition, during this period, consumers increasingly opted for home delivery services as well as take-out.

 

Declining business in Q4 2020

For the fourth quarter of its 2020 fiscal year, McDonald's Group reported results below expectations. In this last quarter of the year, the American fast-food giant generated a turnover of 5.31 billion dollars. It reported a 2% decline compared to Q4-2019.

Also, the turnover came in below the market's expectations of $5.36 billion. US restaurant sales, on the other hand, were up 5.5% (like-for-like) in the quarter under review. In Q4-2020, the company's net income was $1.38 billion (or $1.84 per share), compared to $1.57 billion (or $2.08 per share) in the same period last year.

Earnings per share were $1.70 (excluding non-recurring items) for the quarter. Here too, the group disappointed market expectations. The market was expecting a value of 1.77 dollars.

 

McDonald's dividend and market capitalisation in 2020

McDonald's is one of the companies that pays dividends to its shareholders. Generally, the company pays 4 dividends each year (excluding specials). Here are the details of those paid for the 2020 financial year with the payment dates.

  • 1.29 per share: 15 December 2020 ;
  • 1.25 per share: 15 September 2020;
  • 1.25 per share: 15 June 2020;
  • 1.25 per share: 16 March 2020.

In addition, the share of the world's most famous fast-food chain is of greater interest to investors and traders in the stock market. McDonald's is listed on the New York Stock Exchange. The company is part of the Dow Jones stock index. In 2020, it had a market capitalisation of approximately 143 billion dollars.

72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. This is an advert for trading CFDs on Plus500