Foodservice Equipment Reports

McDonald’s Scales Back Openings, Cap-Ex For 2014

Every penny counts: While McDonald’s Corp. managed to beat third-quarter earnings estimates by a penny—profits were up despite weak sales—the company is re-thinking its 2014 plans.

The chain will be pushing back on opening new restaurants, particularly in China and other emerging markets. The company now expects to spend a total of $3 billion this year on opening and renovating restaurants, about $100 million less than executives had anticipated spending at midyear.

“This is a conscious decision to delay a limited number of new openings into 2014 based on current conditions,” said Peter Bensen, McDonald’s CFO, during a third-quarter earnings conference call. He noted that the company has timed restaurant openings with new retail and housing developments in those regions, but delays in those projects and concerns about economic conditions in those markets are prompting McDonald’s to scale back its plans.

McDonald’s joins other major corporations, including Verizon Communications and Honeywell International, which have noted weak corporate and government spending, and announced their own continued conservative planning.