McDonald’s said in March that it would continue to pay its 62,000 Russian employees, despite shuttering operations in the country. CEO Chris Kempczinski added during a Thursday call with analysts that McDonald’s is supporting Ukrainian employees too: “In both countries, we have continued to pay employees and provide additional support.”
Those staff costs, plus payments for leases and supplies, cost the company $ 27 million.
“Results included … $ 100 million of costs for inventory in the company’s supply chain that likely will be disposed of due to restaurants being temporarily closed,” the company said in a statement.
There were 847 McDonald’s restaurants in Russia at the close of last year, according to an investor document. Together with another 108 in Ukraine, they accounted for 9% of the company’s revenue in 2021.
The closures hit McDonald’s net income, which fell 28% in the three months ending on March 31.
Elsewhere, McDonald’s sales grew.
Globally, sales at restaurants open at least 13 months jumped 11.8% in the quarter, driven by international locations. In the United States, sales popped 3.5%, thanks in part to higher prices. Last year, McDonald’s raised prices by about 6%.