McDonald's Holdings Co. Japan said Tuesday its net profit for the first six months dropped by more than half to 474 million yen, dragged down by a cheap-menu campaign launched in April.
CEO Eiko Harada said the hamburger chain's earnings, however, are projected to grow in the second half with the introduction of pricier items.
For the first half, which ended in June, the company's revenue rose 5 percent to 157.63 billion yen.
Same-store sales, or turnover from those open for at least 13 months, grew 3.2 percent from the same period a year earlier.
In April, the chain revamped its menu, slashing the price of most combos and cutting drink and other side orders to 100 yen as part of a strategy to lure back customers.
Thanks to such efforts, customer traffic jumped 11.7 percent year-on-year.
The menu clearly attracted bargain-hunters attracted by 100 yen items, and average sales per customer fell 7.6 percent from a year earlier.
During a news conference, Harada stressed the sharp drop in per-customer sales had been factored into planning from the beginning.
"Our strategy is to attract customers even at the expense of per-customer sales," he said.
The chain has already entered the next phase of the strategy, in which it attempts to sell pricier items.
For that purpose, during the second half, the chain will reintroduce seasonal fare that was popular and profitable in the past. New sandwich and a la carte items will also be added.
"For the second half alone, our earnings will grow significantly," he predicted.
The company recently announced it will make up for unpaid wages owed to its workers over the past two years.
At Tuesday's new conference, the firm said the payments were not reflected in the second-half earnings projection, as it will take some time to calculate how much back pay is needed.