Dec. 20 (Bloomberg) -- McDonald’s Holdings Co. Japan Ltd. dropped the most in four months in Tokyo trading after announcing store closures and cutting its full-year profit forecast by more than half.
McDonald’s Japan fell as much as 2.4 percent to 2,705 yen, headed for the biggest loss since Aug. 14. The stock dropped 1.7 percent as of 10:18 a.m., trimming this year’s gain to 19 percent, compared with a 47 percent advance for the Topix index.
The Japan business of the world’s largest fast-food chain plans to shut 74 outlets in the country, where it had 3,170 stores at the end of October, as customer numbers were below expectations, it said yesterday. Expenses for outlet closures and store renovations aimed at luring more consumers will be booked this year, leading to the profit forecast cut, McDonald’s Japan said.
Sales fell for five straight months through November in the world’s third-largest economy, McDonald’s Japan, about 50 percent owned by Oak Brook, Illinois-based McDonald’s Corp., said this month.
Net income will probably be 5 billion yen ($48 million) in the year ending December, 57 percent less than its previous projection, McDonald’s Japan said yesterday. That’s less than the 9.53 billion-yen average of three analyst estimates compiled by Bloomberg.
The restaurant chain also cut its forecast for operating profit by 43 percent to 11.5 billion yen.
In April, McDonald’s Japan said it will raise burger prices by as much as 25 percent, its first increase in the North Asian country since 2008, as part of a plan to boost profitability.
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