November 12, 2014

McDonald's Japan expects first annual net loss in 11 years

McDonald's Holdings Co. (Japan) Ltd. said it expects to suffer its first net loss in 11 years this year, thanks to meat-safety issues emanating from China.

In the third quarter alone, the iconic American burger chain reported a net loss of JPY9.4 billion (US$82 million), a dramatic departure from its net profit of JPY1.8 billion (US$15.6 million) in the same period last year.

It said it expects a net loss of JPY17 billion (US$ 147.34 million) in 2014, as against a profit of JPY5.14 billion ((US$44.55 million) in 2013. Its earlier forecast saw a JPY6-billion (US$52 million) profit for the year.

Sales in the July-September quarter also dropped to JPY51.2 billion (US$443.7 million), compared with the JPY67.6-billion (US$585.85-million) sales generated in 2013.

In late July Shanghai Husi Food Co., an arm of US-based OSI Group Inc., was accused in Chinese media of intentionally selling expired meat to restaurant companies including those in Japan.