McDonald's Corp has agreed to sell about 1,600 restaurants in Latin America and the Caribbean to a franchisee organisation led by the man who brought the Golden Arches to Argentina 20 years ago, the company said today.
The world's largest hamburger chain also reported first-quarter earnings that matched a preliminary forecast for better-than-expected profits than it gave last week.
Strong US demand for its new chicken Snack Wrap and improved performance in international markets such as China, Japan, France and Russia helped boost results that continued a turnaround that has lifted the company's stock to its highest level in seven years.
McDonald's shares were up 7 cents at $48.85 today on the New York Stock exchange.
The sale of the Latin American and Caribbean restaurants to an organisation led by businessman Woods Staton - formerly president of McDonald's Argentina - is part of a plan by the company that will free it to focus resources elsewhere.
McDonald's said it expected to receive about $700 million for the sale of the operations and will use the funds for dividends and share repurchases. The company now expects to pay out $5.7 billion for dividends and share repurchases in 2007 and 2008.
The company also said it will post a second-quarter charge of about $1.6 billion related to the sale of the restaurants, about half of which will be for the difference between the book value of the assets being sold and the cash proceeds. The other half will be for accumulated currency losses, the company said.
McDonald's is selling more of its company-owned restaurants to franchisees and has a long-term goal of owning less than 30 percent of its restaurants in a given market. Along with Latin America, the United Kingdom and Canada are markets where McDonald's is looking to reduce its restaurant ownership.