McDonald’s Jumps as CFO Discusses Returning Cash
March 11 (Bloomberg) -- McDonald’s Corp., the world’s
largest restaurant chain, rose the most in more than two years
after Chief Financial Officer Pete Bensen said the company may
look to cut costs and borrow more cash to return to investors.
The shares climbed 3.8 percent to $98.78 at the close in
New York for the biggest gain since Aug. 9, 2011. Oak Brook,
Illinois-based McDonald’s has advanced 1.8 percent this year,
while the Standard & Poor’s 500 Restaurants Index has increased
McDonald’s is “actively looking at ways to optimize our
capital structure, while maintaining our long-term financial
strength,” Bensen said today at an investor conference. That
includes scrutinizing general and administrative expenses and
selling stores to franchisees in countries such as China, South
Korea and Taiwan, he said.
McDonald’s can “probably get more aggressive” with its
borrowings and still maintain its credit rating, Bensen said. In
response to a question, he said that McDonald’s could raise its
target of returning $5 billion in cash to shareholders if the
company increased its leverage.
The company has been struggling to turn around declining
same-store sales amid shaky consumer confidence and harsh
weather. McDonald’s said yesterday that sales at its locations
open at least 13 months fell 0.3 percent in February as drops in
the U.S. and its Asia Pacific, the Middle East and Africa region
dragged down results.
“They’re basically looking at ways to cut some costs and
maybe refranchise a little bit more,” Peter Saleh, a New York-based analyst at Telsey Advisory Group, said in an interview.
“Less corporate ownership means less G&A.”
McDonald’s has about 35,400 stores worldwide, and about 81
percent of those are franchised.
To contact the reporter on this story:
Leslie Patton in Chicago at
To contact the editors responsible for this story:
Nick Turner at
Last Updated: March 11, 2014 16:24 EDT