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McDonald’s estimates that temporarily suspending operations and closing its restaurants in Russia will cost about $50 million a month, or about 5-6 cents per share.
| Ticker | Security | past | Change | Change % |
|---|---|---|---|---|
| MKD | McDonald’s Corporation. | 222.35 | -0.35 | -0.16% |
McDonald’s restaurant in Moscow, Russia, April 2018. (REUTERS/Tatyana Makeeva/Photo from file)
The decision, which came Tuesday in response to Russia’s ongoing incursion into Ukraine, came after calls for a boycott against the company and other brands operating in Russia gained momentum on social media over the weekend.
The New York State General Pension Fund, one of the largest public pension funds in the US, also warned the company in a letter that they would face “significant and growing legal, compliance, operational, human rights, and personnel, and reputational risks” from -for ongoing operations in Russia.
MCDONALD’S SUSPENDS WORK IN RUSSIA, TEMPORARILY CLOSE RESTAURANTS
McDonald’s chief financial officer Ken Ozan stressed at the UBS Global Consumer and Retail Conference on Wednesday that the fast food giant is still calculating the total impact, which will include paying for rented space, wages for approximately 62,000 employees in Russia, and related deliveries. chain costs and other costs.
McDonald’s owns approximately 84% of its 847 locations in Russia and 100% of its 108 locations in Ukraine. Russia and Ukraine combined accounted for roughly 2% of the company’s system-wide sales, roughly 9% of its revenue, and less than 3% of its operating profit in 2021. In the fourth quarter of 2021, McDonald’s had a total net income of $1.64 billion, or $2.18. per share for a total revenue of $6.01 billion.
“We expect this to be temporary. And we certainly do not take this decision lightly,” added Ozan. “But for us, it’s about doing what we think is right, both for our global business and for our local people. So we will continue to assess the situation and hopefully be able to keep people informed as things unfold.”
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Other companies that suspended operations in Russia on Tuesday include Starbucks, Coca-Cola, PepsiCo, YUM! Brands and Papa Johns.
| Ticker | Security | past | Change | Change % |
|---|---|---|---|---|
| SBUX | STARBUCKS CORP. | 87.60 | +3.60 | +4.29% |
| knockout | COCA-COLA CO. | 58.96 | +0.30 | +0.51% |
| PKP | PEPSICO INC. | 157.40 | -0.47 | -0.30% |
| YUM | Yum! BRANDS INC. | 116.02 | +0.78 | +0.68% |
| PZZA | PAPA JOHN’S INTERNATIONAL INC. | 98.45 | +4.28 | +4.54% |
McDonald’s shares are down about 16% since the start of the year.