It was a natural to ask what McDonald’s Corporation (NYSE:MCD) is going to do with its Japanese subsidiary. That was primarily because of the number of issues it had to face in the recent past. It faced every type of problem like expired Chinese meat, human tooth in a serve of fries, and potato shortages. Those were some of the issues that it was forced to face with. It now appears that the company has no alternatives but to follow the steps of Yum! Brands, Inc. (NYSE:YUM), which also faced similar problems.
Plans To Sell Stake
The option that McDonald’s Corporation (NYSE:MCD) appears to be contemplating is to divest at least 33% of its holdings to slash its 50% stake. The restaurant retailer has already been meeting potential buyers, according to a report in the Nikkei. In the last two-year period, there was some stomach-churning news, and the current move suggested that it was on course to mend itself.
As a result, it was able to report YOY increase in revenue for the first time in the September quarter after the year 2011. That should enable it to achieve 25% growth in sales in the current quarter subject to reaching its guidance of $1.65 billion or 200 billion Yen revenue for the full year period. The same might apply in respect of comparable store sales. Though the numbers might suggest a minus sign, the recent trend suggested that McDonald’s Corporation (NYSE:MCD)’s comparable store sales would report growth.
Better Performing Sector
Aside from other things, the restaurant was one of the better-performing segments in the country’s economy as more Japanese were turning towards the restaurants to eat. Also, the participation of women workforce has exceeded the America while weaker yen boosted fresh food prices. As a result, consumers believe that there was not much to save by making cooking meals at home.
However, the problem that McDonald’s Corporation (NYSE:MCD) faces in Japan is the loss. The company disclosed a one-time charge of 16 billion yen and guided an annual loss of 38 billion Yen. It appears that PE data could not be relied upon for the restaurant business in Japan.
