McDonald's Corp. (MCD)'s Japan business plans to close 74 outlets in the country as the fast-food operator cut its full-year profit forecast by more than half in its second-largest market.
Net income will probably be 5 billion yen ($48 million) in the year ending December, 57 percent lower than its previous forecast, McDonald's Holdings Co. Japan Ltd. said in a statement to Tokyo's stock exchange yesterday. That compares with an average estimate of 9.53 billion yen from three analysts compiled by Bloomberg. The company had 3,170 outlets in Japan as of the end of October.
The earnings shortfall came after sales fell for five straight months through November in the world's third-largest economy, said McDonald's Japan, about 50 percent owned by the Oak Brook, Illinois-based McDonald's.
"The number of customers during the first quarter was ''well below the company's expectations,'' McDonald's Japan said yesterday, citing investment costs to improve customer numbers as well as costs on store closures for the change in forecast.
Source: Bloomberg
