Latest News by Industry
• Burger chain to retain trademark in Russia
• Company to take non-cash charges of up to $1.4 billion
McDonald’s Corp (NYSE: MCD) on Monday said it would exit the Russian market after operating for more than three decades and has initiated a process to sell its restaurants in the country.
The company became one of the biggest global brands to exit Russia following the invasion of Ukraine.
McDonald’s said it was seeking to sell its entire portfolio of restaurants in Russia to a local buyer and initiated the process of “de-Arching” those restaurants, which will restrict them from using McDonald’s name, logo, branding, and menu.
However, the company will still continue to retain its trademarks in Russia.
In March, McDonald’s announced to temporarily halt all operations in the country and said the chain would continue paying its 62,000 Russian employees.
“We have a commitment to our global community and must remain steadfast in our values. And our commitment to our values means that we can no longer keep the Arches shining there,” McDonald’s President and Chief Executive Officer Chris Kempczinski said in a statement, thanking its Russian workforce and suppliers.
The world’s largest burger chain owns about 84% of its nearly 850 restaurants in Russia and will take a related non-cash charge of up to $1.4 billion following its sale.
Shares of the company plunged nearly 2% on Monday at 10 am in New York but recovered some of the losses later on the day.
McDonald’s reaffirmed its prior 2022 outlook and said that it expects operating margin to be in the 40% range as a result of the charge for Russia. Excluding impairment and other strategic charges, the company expects an adjusted operating margin in the mid-40% range.
The company last year generated about 9%, or $2 billion, of its revenue from Russia and Ukraine.
Picture Credit: National Review
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