McDonald’s Holdings Co. Japan Ltd. fell as much as 2.4 percent, its lowest in Tokyo trading after making public its decision to close 74 stores all over Japan and cutting its projected annual profit by almost half. This would be the biggest loss for the company, around 50 percent of which is owned by the Illinois-based McDonald’s, since August 14.
The world’s largest fast-food chain announced that sales from their branches in Japan fell for five straight months until November, with a lot of stores getting number of customers that are way below their expectations. This led to the decision to shut down 74 out of 3,170 stores all over the country. The expenditures from the supposed-renovations to attract more customers and branch shut-downs will be booked this year, hence the cut in profits.
The net income for this year is estimated to be around 5 billion yen ($48 million), around 57 percent lower than what was previously forecasted and less than the 9.53 billion yen average estimated by three analysts at Bloomberg. Earlier this year, the company announced that they were increasing the prices of burgers by almost 25%. This was the first time that they raised their prices in Japan, in a bid to boost profits. But even that move failed to increase sales, leading to their latest drastic move.