|
McDonald's looks overseas
|
 |
July 17, 1997: 2:18 p.m. ET
Chain will open 2,400 restaurants in 1997, 80 percent of them outside U.S.
|
NEW YORK (CNNfn) - Getting a Big Mac should become a little easier, at least overseas, as McDonald's Corp. said Thursday it will open 2,400 new restaurants this year.
The fast-food chain announced the expansion plans in its quarterly earnings report, released Thursday. The report shows second-quarter net income of $438.2 million, or 63 cents a share, up from $420.4 million, or 59 cents a share, in the year-ago period.
Overall, the company said sales for the quarter rose to $8.47 billion from $7.9 billion a year earlier.
McDonald's (MCD) said 80 percent of the 2,400 restaurants will be built outside the United States, explaining that local management has requested the expansion.
The international market has been a lucrative one for the company. Quarterly sales overseas increased 11 percent to $4.05 billion, trailing just behind domestic sales of $4.42 billion. In the past five years, McDonald's has added 5,800 restaurants overseas, compared with 4,500 in the United States, the company said.
Earnings were in line with Wall Street expectations and provided some good news for a company that has had a tumultuous year and recently underwent a reorganization.
Under that plan, McDonald's reorganized its U.S. business into five geographic regions, each led by a newly appointed president, in an attempt to put decision making and accountability closer to the actual franchise restaurants.
That process was precipitated by the failed "Campaign 55," which lowered prices of its Big Mac to 55 cents to jumpstart flagging sales. Instead, consumers started jumping over to other fast food outlets such as Wendy's and Burger King , and franchise managers fumed over what they felt was heavy-handed central management.
The job of overseeing the changes will fall to Jack Greenberg, who was named chairman and CEO of the U.S. operations. In the earnings report, he admitted that "1997 is a year of transition for our U.S. business," but looked to a changing outlook for McDonald's.
"I remain very optimistic about our long-term opportunities to grow profitably in the domestic marketplace," Greenberg said.
-- Randy Schultz
|
|
|
|
|
|
McDonald's
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
