India markets closed

    -1,939.32 (-3.80%)
  • Nifty 50

    -568.20 (-3.76%)

    +1.1760 (+1.62%)
  • Dow

    -469.64 (-1.50%)
  • Nasdaq

    +72.92 (+0.56%)

    -191,163.75 (-5.47%)
  • CMC Crypto 200

    -20.25 (-2.17%)
  • Hang Seng

    -1,093.96 (-3.64%)
  • Nikkei

    -1,202.26 (-3.99%)

    +1.0140 (+1.14%)

    +1.2652 (+1.24%)

    +0.3210 (+1.62%)

    -0.0183 (-1.26%)

    +0.6850 (+1.25%)

McDonald's (MCD) Closes Dine-in & Takeaways Services in UK

Zacks Equity Research
·3-min read

With new lockdown restrictions in place in the U.K., McDonald's Corporation MCD recently announced that it is stopping walk-in takeaway services. The company has also temporarily halted dine-in services.

The company has nearly 1,300 restaurants across the U.K. However, its stores will remain open during the lockdown but with a few alterations. McDonald's announced restaurants across the U.K and Ireland will be open for drive-thru and McDelivery.

The impact of coronavirus outbreak is likely to get reflected in the company’s results in the coming quarters. Due to a rise in COVID-19 cases (since September), there has been an increase in government restrictions on operating hours, limited dine-in capacity and mandated dining room closures (in some cases).

With increase in coronavirus cases, the company is likely to witness dismal comps and traffic in fourth-quarter 2020. The company’s comps declined for the third straight quarter after reporting positive comps in the preceding 19 quarters. In the third quarter, global comps declined 2.2% against a gain of 5.9% in the prior-year quarter. In second-quarter 2020, comps were down 23.9%.

Shares of the company have gained 13.6% in the past six months, compared with the industry’s rally of 22.2%.

Digitalization: A Major Growth Driver

Amid the coronavirus pandemic the company has been focusing on drive-thru, delivery and take-away. Prior to the coronavirus outbreak, drive-thru accounted for about two-thirds of all sales in the United States. Drive-thru now accounts for approximately 90% of sales. Moreover, McDonald’s continues to roll out mobile order and pay, with a new curbside check-in option. To provide enhanced experience and convenience to customers, the company has been increasingly focusing on delivery. It provides delivery from more than 28,000 restaurants in above 75 countries. In third-quarter 2019, it partnered with Grubhub for the rollout of McDelivery to nearly 500 restaurants in the NYC and Tri-State area. It has also collaborated with DoorDash.

During third-quarter 2020, strong drive-thru and delivery sales got reflected in Australia sales despite restricted operating conditions due to a rise in COVID-19 cases. Notably, the majority of the orders came from digital channels such as mobile app and self-order kiosks. Also, solid comps were witnessed in Japan.

Zacks Rank & Key Picks

McDonald’s currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the same space include Yum China Holdings, Inc. YUMC, The Wendy's Company WEN and Yum! Brands, Inc. YUM, each carrying a Zacks Rank #2 (Buy).

Yum China, Wendy's and Yum! Brands have a three-five year earnings per share growth rate of 9%, 12.6% and 12.3%, respectively.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
McDonalds Corporation (MCD) : Free Stock Analysis Report
The Wendys Company (WEN) : Free Stock Analysis Report
Yum Brands, Inc. (YUM) : Free Stock Analysis Report
Yum China Holdings Inc. (YUMC) : Free Stock Analysis Report
To read this article on click here.