McDonald's Japan Quarterly Loss Narrows After Menu Changes

  • Number of customers rose for fourth straight month in April
  • U.S. parent had said it was studying sale of stake in the unit

McDonald’s Holdings Co. (Japan)’s first-quarter loss narrowed as the fast-food chain won back some customers after being hit by a series of food safety scandals.

The net loss was 176 million yen ($1.6 million) for the three months ended March 31 compared with 14.6 billion yen a year earlier, the Japan unit of McDonald’s Corp. said in a statement Wednesday. Revenue rose 28 percent to 52.2 billion yen. The company maintained its full-year profit forecast at 1 billion yen, according to the statement.

The number of customer visits to McDonald’s Japan business increased for a fourth consecutive month in April as the Tokyo-based company introduced menu tweaks while shutting stores and cutting jobs following food scandals that caused it to post its second straight year of losses in 2015.

“McDonald’s is successfully gaining family-type consumers,” Seiichiro Samejima, an analyst at Ichiyoshi Research Institute Inc., said by phone before the result was announced. “It’s been taking time, but what President Sarah Casanova wanted to do has been proven right. The company is on a recovery track.”

Revenue is expected to slump in the current quarter compared with the first three months of the year, due to seasonal factors, and the chain will speed up investments including upgrading outlets to maintain growth, McDonald’s Japan investor relations representative Keiji Nakazawa said in a briefing in Tokyo.

Enlarged Burger

Sales at its stores open at least a year jumped 19 percent in April with the number of visitors rising 5.1 percent and per-customer spending increasing 13 percent, the company said on May 6, citing greater than expected sales of enlarged Big Mac sandwiches.

In January, the Japanese chain’s Oak Brook, Illinois-based parent said it was studying the prospect of selling a stake in the unit. Casanova, who’s also chief executive officer of McDonald’s Japan, said the following month it’s premature to comment on the stake sale.

“The situation hasn’t changed” since Casanova’s comments in February, the Japanese chain’s spokesman Kenji Kaniya said at the briefing. “This is McDonald’s Corp.’s confidential matter and we haven’t obtained any information.”

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