McDonald's Holdings Co. (Japan) on Thursday reported a ¥5.37 billion ($48 million) group net profit for 2016, returning to profitability after years of slumping sales triggered by food safety scandals.
The profit is a sharp turnaround from its ¥34.95 billion net loss last year, its biggest since becoming a publicly listed company in 2001. It is also well above its November estimate of a ¥3.8 billion profit.
The Japanese unit of the global fast-food chain said its focus on regaining customer trust and turning around its business through menu changes, renovations and other steps contributed to the better-than-expected result.
McDonald's Japan posted an operating profit of ¥6.93 billion, compared with a ¥23.44 billion loss the previous year, and a 19.6 percent gain in sales to ¥226.65 billion.
McDonald's business in Japan has struggled in recent years due to food quality problems, including a 2014 scandal that involved a meat supplier in China that was shipping it chicken meat that had already expired.
Its turnaround efforts included collaboration with the popular mobile phone app "Pokemon Go" to make its restaurants key locations for players of the augmented reality game, the company said.
On a same-store basis, sales rose 20 percent and patronage rose 9.1 percent last year, it said.
For 2017, McDonald's Japan expects net profit to increase 58.4 percent to ¥8.5 billion, and operating profit to rise 29.9 percent to ¥9 billion, on a 4.3 percent increase in sales to ¥236.5 billion.