McDonald's Outlines Restructuring Charges
October 13 2016 - 6:20PM
Dow Jones News
McDonald's Corp. said Thursday that it expected to book pretax
charges of about $130 million in its September quarter related to
the company's previously announced restructuring and refranchising
efforts.
Last November, among other moves, McDonald's announced plans to
increase the number of restaurants it would to sell to franchisees
to 4,000 by the end of 2018, from its earlier target of 3,500.
McDonald's said Thursday that the charges total 12 cents a share
after taxes and that it expected to incur more such costs in the
future. The company will provide more details on the charges and
its refranchising moves when it reports earnings on Oct. 21.
Shares were flat at $115.41 in after-hours trading.
Under Chief Executive Steve Easterbrook, the fast-food icon has
sought to revamp its structure as well as its food as it contends
with many fast-casual players like Panera Bread Co. and burger
upstarts like Five Guys Holdings LLC and Shake Shack Inc.
The company's big moves have included offering all-day
breakfast. It has announced several personnel changes in recent
months, including the retirement of U.S. President Mike Andres and
Chief Administrative Officer Pete Bensen. David Hoffmann, a 22-year
McDonald's veteran, left to join Dunkin' Donuts.
In November, McDonald's also increased its goal for general and
administrative cost-savings to $500 million from $300 million. It
also said it would boost cash returns to shareholders, partly by
issuing debt at a time of low interest rates. Last month, it raised
its quarterly dividend 6%, citing "meaningful progress" in its
turnaround plan.
McDonald's has taken several steps as it looks to improve food
quality, such as switching from cooking beef patties on Teflon
sheets to searing them on an iron grill. In a consumer marketplace
that has grown more focused on healthy ingredients, the chain said
sugar would replace high-fructose corn syrup in hamburger buns.
The company has also enhanced social media efforts as it tries
to win back younger customers. Just one in five millennials has
ever tried the Big Mac, according to an internal memo reviewed by
The Wall Street Journal.
Julie Jargon contributed to this article.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
October 13, 2016 18:05 ET (22:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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