Grow Your Business and Join MarketWorld Marketplace and Create Your Own Store front

Saturday, July 20, 2024

HomeStock MarketMcDonald’s says Russian shutdown will cost the fast-food chain $50 million a...

McDonald’s says Russian shutdown will cost the fast-food chain $50 million a month : stocks

McDonald’s expects its Russian shutdown will cost the fast-food giant roughly $50 million a month until it reopens its restaurants there. The Chicago-based company announced Tuesday it would temporarily shutter its Russian locations as Russian President Vladimir Putin’s forces continue their attacks on Ukraine. McDonald’s has about 850 locations in Russia, the majority of which are owned by the company, not franchisees. Other U.S. restaurant companies, including Starbucks, Yum Brands and Papa John’s followed McDonald’s lead, as well as its soda supplier, Coca-Cola. Because most of its restaurants in Russia and Ukraine are company-owned, McDonald’s has greater exposure than most other U.S. fast-food chains with locations in those markets. The burger chain drew criticism for staying silent on the war until it announced the closures.

McDonald’s CFO Kevin Ozan said at the UBS Global Consumer and Retail Conference on Wednesday that the company is still calculating the impact on its business. However, McDonald’s currently estimates that it will cost about $50 million per month, or roughly 5 cents to 6 cents per share. For comparison, McDonald’s reported fourth-quarter net income of $1.64 billion and earnings per share of $2.18. The company has committed to paying all of its approximately 62,000 Russian employees during the pause in restaurant operations. Ozan said McDonald’s will also be paying leases for its locations, as well as supply chain costs and other expenses.

“We expect this to be temporary and we certainly don’t take this decision lightly, but for us this is about doing what we think is the right thing to do, both for the global business and for our people locally,” he said. McDonald’s has long played a symbolic role in Russia. The chain opened its first location in the Soviet Union 32 years ago in Moscow, months before the state collapsed. In addition to closing its Russian locations temporarily, McDonald’s has also shuttered 108 restaurants in Ukraine for the time being. Russia and Ukraine together account for roughly 2% of McDonald’s systemwide sales, 9% of its revenue and 3% of its operating income.

Source link

Bookmark (0)
- Advertisment -spot_img

Most Popular

Sponsored Business

- Advertisment -spot_img