Why did McDonald's close 200 stores? How many McDonald's stores are there in the Chinese market?

McDonald's closes 200 stores

On July 28, McDonald's (MCD) released its second quarter report for fiscal year 2020. It is reported that as of June 30, 2020, McDonald's Q2 consolidated revenue was approximately US$3.761 billion, a year-on-year decrease of 30%, and net profit was US$484 million, a sharp decrease of 68% year-on-year. McDonald's Q2 global comparable sales fell 23.9%.

McDonald's reported GAAP earnings per share of $0.65 per share and non-GAAP earnings per share of $0.66 per share in Q2, down 67% and 68% respectively from the same period last year.

"Sales performance declined due to temporary restaurant closures, limited operations and dramatic changes in consumer behavior caused by COVID-19," the report explained as the reason for McDonald's poor performance in the second quarter.

It is noted that although McDonald's Q2 quarterly decline was larger than its Q1 global comparable sales which fell by 3.4%, in Q2, McDonald's global comparable sales showed a "recovery" phenomenon for consecutive months. McDonald's reported global comparable sales of -39%, -20.9% and -12.3% for the periods ended April 30, May 31 and June 30.

"We saw continued improvement in our second quarter results as markets around the world reopened," said Chris Kempczinski, McDonald's president and CEO. The report shows that as of June 30, 2020, 96% of McDonald's restaurants worldwide have resumed operations.

On the other hand, it is noted that due to the low sales of McDonald’s Walmart stores in the United States, McDonald’s expects the company to close more than half of its Walmart stores in the United States this year, with a total of about 200 stores closed. The report described the move as "an acceleration of planned closures over the next few years." It is reported that as of the end of Q2, including existing Walmart stores in the United States, McDonald's has a total of 13,835 restaurants, a decrease of 51 from the previous year.

It is worth mentioning that although McDonald's plans to close about 200 restaurants in the United States, in terms of its full-year store plan, it will continue to expand the scale of restaurants worldwide. McDonald's said that "the company expects to open approximately 950 restaurants worldwide, with a net increase of approximately 350." It is learned that McDonald's currently has 39,020 restaurants worldwide, an increase of 912 from last year.