Donald Trump’s wide-ranging tax reforms have cost McDonald’s – reputedly one of the president’s favourite restaurant chains – hundreds of millions of dollars in unavoidable expenses linked to the legislation.
The company said the Tax Cuts and Jobs Act, which aims to reduce corporation tax from 35pc to 21pc, has cost it a net $700m (£500m), equivalent to 82 cents a share. The news took around 0.4pc off McDonald’s shares in early trading in the US to put them at $177.11.
The figure was caused by a $1.2bn tax cost on the repatriation of foreign earnings partly offset by a $500m benefit due to the lower tax rate and meant earnings were marginally below the expectations of Wall Street.
But stripping out this and other exceptional items such as the $342m it spent honing the company’s strategy, its earnings were up 10pc to $5.4bn in 2017, in spite of a 7pc drop in total sales to $22.8bn.
McDonald's, which is run from the US by Brit Steve Easterbrook, said like-for-like global revenue rose 5.3pc.
The restaurant chain does not give a detailed geographical breakdown of how it is performing but said like-for-like sales in its ‘international lead’ division, which includes the UK, were up 6pc.
The boss of the UK business, Paul Pomroy, said it hit its 47th consecutive quarter of sales and customer growth in 2017, serving more than a billion customers.
Mr Pomroy said developments such as digital self-order screens, table service and drive-thrus had helped attract greater footfall, while a click and collect service as well as home delivery in parts of the country had helped it in the eat-at-home market.
“Following its launch last summer, we’ve seen McDelivery go from strength to strength, now live in over 270 restaurants nationwide, and New Year’s Day was our busiest ever for the service,” Mr Pomroy said.
The UK boss added that its ‘Meals Under’ range, combinations of food and drink under 400 and 600 calories, had also proved popular.
“All achieve amber and green on the Food Standards Agency traffic light system for fat, saturated fat, salt and sugar,” Mr Pomroy said.
“It’s about serving up information in an easy way for customers so they can make informed choices, and the kiosks are a perfect way of doing that.”Elsewhere, McDonald’s said it planned to invest roughly $2.4bn in 2018, mostly in improving its existing store estate although it expects to open roughly 1,000 new restaurants.