Kevin Ozan, the CFO of McDonald’s Corp. (NYSE: MCD), has said the company expects to lose nearly $50 million per month or around $0.05 to $0.06 a share as a result of closing its outlets in Russia, according to a report published by Barron’s.
“We expect this to be temporary, and we certainly don’t take this decision lightly,” Ozan added.
The fast-food restaurant chain plans to pay its in-restaurant and out-of-restaurant staff for the period its Russian locations are closed. It will also continue to bear supply-chain-related expenses and pay leases for the sites in the country.
On Tuesday, McDonald’s CEO, Chris Kempczinski, said in a blog that the company would suspend its operations in Russia following the country’s invasion of Ukraine.
Russia, along with Ukraine, make up 9% of the burger giant’s annual global revenues.
About McDonald’s
Based out of Chicago, McDonald’s operates and franchises over 30,000 restaurants in over 100 nations. Its most popular products include Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, Chicken McNuggets, McDonald’s Fries, McFlurry desserts, and McCafé beverages, among others.
Wall Street’s Take
On March 8, Stephens analyst James Rutherford maintained a Hold rating on the stock with a price target of $280 (26% upside potential).
The analyst said, “The decision to forego sales and continue paying staff could temporarily cause a more pronounced impact on operating income than the 3% operating income mix would suggest.”
Overall, McDonald’s has a Strong Buy consensus rating based on 21 Buys and 3 Holds. The average MCD price target of $286.95 implies 29% upside potential. Shares have lost 16.7% year-to-date.
Website Traffic
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), the world’s biggest website usage monitoring service, offers insight into McDonald’s performance.
According to the tool, compared to the previous year, McDonald’s website traffic registered a 20.8% decline in global visits year-to-date.
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