The Japanese unit of U.S. fast-food chain McDonald's expects its loss for this fiscal year to double because of a special loss it will book for costs related to cutting ties with a longtime management consultant.
McDonald's Holdings Co. said Friday it will post a special loss of 6.25 billion yen to cover the cost of canceling a management consultant service agreement with Fujita & Co., a company founded by McDonald Japan's former president and founder, Den Fujita.
McDonald's Japan said it now expects a group net loss of 7.48 billion yen for the year through Dec. 31, worse than its previous projection of a 3.70 billion yen loss.
It estimates sales for the year will total 299.80 billion yen, up slightly from its previous forecast of 298.27 billion yen. High management fees the company has paid to Fujita & Co. have weighed on its bottom line at a time when the burger chain has been struggling to woo Japanese consumers.
Competition among restaurants has heated up lately amid dropping prices at various chains.
McDonald's was also badly hurt by a mad cow scare here two years ago that drove many Japanese away from beef, although McDonald's in Japan uses Australian beef, which has not been affected by the fatal, brain-wasting illness.