McDonald's Sees $235 Million in Refranchising, Moving Charges

By Publications Checkout
McDonald's Sees $235 Million in Refranchising, Moving Charges

McDonald’s, which is starting to revive sales, is incurring about $235 million in charges related to selling locations to franchisees, cutting costs and moving its corporate headquarters.

The pretax charges, which amount to about 20 cents a share after taxes, were taken in the second quarter, the Oak Brook, Illinois-based company said in a statement on Thursday. McDonald’s will incur additional charges related to its strategic moves.

The charges are the result of Chief Executive Officer Steve Easterbrook’s turnaround plan, which includes refranchising restaurants and cutting general and administrative expenses. Last year, the company said it was planning to sell 4,000 of its stores globally by the end of 2018. It also is targeting a $500 million cut in annual costs, which will mostly be realised by the end of next year. Last month, McDonald’s said it’s planning to move its headquarters from the suburbs to downtown Chicago -  another contributor to the impairment charges.

McDonald’s will report full second-quarter results on July 26.

News by Bloomberg, edited by Hospitality Ireland