Industry News | November 8, 2002
McDonald’s Closing Stores and Eliminating Positions
McDonald’s Corporation (NYSE: MCD) announced today additional efforts to revitalize its business and corporation structure.
Changes include restructuring four countries and closing three countries, closing approximately 175 underperforming restaurants in about 10 other countries, and eliminating 400-600 positions (200-250 in the U.S.) to control costs and reallocate resources.
McDonald's expects these actions will reduce its fourth quarter 2002 pretax income by about $350-$425 million, most of which will be non-cash. The restructuring and closing of countries, together with the closing of underperforming restaurants, will comprise the vast majority of this amount.
In addition, McDonald’s announced October sales results. Systemwide sales totaled $3.5 billion for October and $34.5 billion for the first ten months of 2002, up 3% and 2%, respectively in constant currencies.
The company also said it would miss 2002 earnings estimates, sending the pre-opening share price down 7.3% Friday morning.
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