McDonald’s Corp. (MCD) is planning to delay the reopening of its dining restaurants in the U.S. by 21 days in response to the rising numbers of coronavirus cases.
The fast-food chain said that it would wait three weeks before any new U.S. restaurants add dine-in service to its drive-through, takeout and delivery operations, the Wall Street Journal has learnt. The move comes as more states, cities and countries are halting reopening plans for bars and restaurants due to the rising number of virus infections.
“Our resiliency will be tested again. COVID-19 cases are on the rise,” said a company letter by McDonald’s U.S. president Joe Erlinger and National Franchisee Leadership Alliance head Mark Salebra, that was seen by The Wall Street Journal. “To be clear: owner/operators will make the final decision in these situations.”
McDonald’s operators started offering limited, dine-in service in May, and around 2,200 of its 14,000 U.S. restaurants now allow customers to eat their meals inside. Restaurant owners that have already started offering dine-in service can continue if their jurisdiction still allows it, the letter said, but the company decided to put a brake on additional openings ahead of the July 4 holiday weekend.
Almost all of McDonald’s U.S. restaurants stay open for drive through, delivery and take-out options.
Shares in McDonalds have been hit hard earlier this year as the coronavirus-induced lockdowns, led to shutdowns of fast-food restaurants and a decline in sales.
With the stock still down about 7% year-to-date, analysts have a cautiously optimistic outlook on the shares. The Moderate Buy analyst consensus breaks down into 20 Buy ratings versus 7 Hold ratings. Meanwhile, the $208.04 average price target implies 13% upside potential in the shares over the coming 12 months. (See MCD stock analysis on TipRanks)
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