McDonald's sales suffer
McDonald's Corp reported a broad drop in global same-store sales and missed profit expectations, as its restaurants were shut due to the Covid-19 pandemic, limiting operations to only drive-thru and delivery.
Shares of the Chicago-based burger chain sank more than 2.5%. Global same-store sales fell 23.9% in the second quarter, dragged down by big international markets including the United Kingdom, France and Latin America.
Analysts had forecast a 23.24% fall, according to IBES data from Refinitiv. In the United States, where the company operates more than a third of its restaurants, same-restaurant sales fell 8.7% but were better than the anticipated 9.97% fall, as most locations were able to stay open with drive-thru and delivery options.
On a conference call with investors, executives struck a cautious tone but noted that US July sales have improved and should end "slightly positive" for the full month.
The second quarter "represents the trough in our performance as McDonald's has learned to adjust our operations to this new environment," chief executive officer Chris Kempczinski said. – Nampa/Reuters
Rite Aid deployed systems
Over about eight years, the American drugstore chain Rite Aid Corp quietly added facial recognition systems to 200 stores across the United States, in one of the largest rollouts of such technology among retailers in the country, a Reuters investigation found.
In the hearts of New York and metro Los Angeles, Rite Aid deployed the technology in largely lower-income, non-white neighbourhoods, according to a Reuters analysis.
In telephone and email exchanges with Reuters since February, Rite Aid confirmed the existence and breadth of its facial recognition program. The retailer defended the technology use, saying it had nothing to do with race and was intended to deter theft and protect staff and customers from violence.
Last week, however, after Reuters sent its findings to the retailer, Rite Aid said it had quit using its facial recognition software. It later said all the cameras had been turned off.
"This decision was in part based on a larger industry conversation, the company told Reuters in a statement, adding that other large technology companies seem to be scaling back or around facial recognition given increasing uncertainty around the technology utility. – Nampa/Reuters
Facebook, Amazon to defend
Amazon.com Inc chief executive Jeff Bezos and Facebook Inc's Mark Zuckerberg will defend their respective companies before a congressional hearing on Wednesday by saying they face intense competition from large rivals.
Bezos and Zuckerberg's written testimony, made public on Tuesday, will be presented to a panel of lawmakers investigating how their business practices and data gathering have hurt smaller rivals.
Bezos says Amazon occupies a small share of the overall retail market and competes with retailers like Walmart, which is twice its size. He also says the coronavirus pandemic boosted e-commerce businesses across the spectrum and not just Amazon.
Bezos also lays out how small sellers have succeeded on its third-party marketplace, a practice that has come under scrutiny from lawmakers.
Zuckerberg argues that the social media company became successful "the American way, by starting out with nothing and providing products that people find valuable. – Nampa/Reuters
Starbucks 'steadily recovering
Starbucks Corp's business is "steadily recovering" worldwide as most of the coffee chain's stores have reopened with the easing of coronavirus-led restrictions, it said on Tuesday.
Shares of the Seattle-based company rose about 6.5% in extended trading after it said it would return to profitability in the current quarter on improving sales and margins.
Comparable store sales fell 40% globally and 41% in the Americas for Starbucks' third quarter ended June 28. This was less than analysts' forecast for declines of 42.05% and 42.82% respectively, according to IBES data from Refinitiv.
Starbucks, like many restaurants and coffee chains, took a big hit from government-imposed measures to curb the pandemic, prompting it to rely more on delivery and drive-thru services to make up for lost business.
More people used the chain's drive-thru and delivery options to buy coffee and food, with mobile orders rising 6 percentage points from a year ago to make up 22% of total transactions in the quarter. – Nampa/Reuters
Visa beats estimates
Visa Inc's results topped analysts' estimates on Tuesday with a 23% drop in quarterly profit as consumer spending continued to be pressured by high unemployment due to lockdowns aimed at curbing the coronavirus outbreak.
Net income fell to US$2.37 billion, or US$1.07 per Class A share, in the quarter ended June 30, from $3.10 billion, or US$1.37 per Class A share, a year earlier.
Analysts had estimated, on average, that the company earned US$1.03, according to IBES data from Refinitiv. Analysts at Jefferies attributed the beat to lower-than-expected expenses. Visa shares traded down nearly 2% after market hours.
The quarter was the first to reflect how spending on Visa transactions was impacted for three straight months by coronavirus-related shutdowns.
Visa said total payments volume decreased 10%, on a constant dollar basis, and the number of process transactions declined 13% from a year earlier. Cross-border volume fell 37%, reflecting the fall in international travel.– Nampa/Reuters