Golden arches lack luster as McDonald's Japan reports ¥26.2 billion loss in year to June

McDonald’s Japan on Wednesday reported a record net loss of ¥26.2 billion for the first six months of the year, highlighting its continued struggles after a string of widely reported quality concerns.

Net sales by McDonald’s Holdings Co. (Japan) plunged 29.5 percent between January and June to ¥85.2 billion compared to ¥121 billion in sales and ¥1.85 billion net profit for the same period last year.

Both 2015 six-month figures were the lowest since the company went public, McDonald’s said.

McDonald’s was hit hard by the Chinese expired-meat scandal last July and a string of food quality issues in Japan including a human tooth found by a customer in a serving of french fries.

McDonald’s Japan CEO Sarah Casanova said the business results were largely in line with expectations, but “we are still not satisfied where we are,” she said.

She added that although the business environment has been extremely challenging there are some signs of recovery for the nation’s biggest burger chain.

“We are seeing progress as we continue to implement our revitalization plan. We are seeing customers gradually coming back to restaurants,” and improvements are being seen in customer satisfaction and brand trust, she said.

The company said it is now more focused on customers’ needs and has introduced healthy menus such as burgers with more vegetables. The company has also been conducting surprise store inspections by third parties.

She said August sales are expected to exceed those of a year earlier.

Casanova also said McDonald’s will be remodeling about 500 stores by the end of this year to enhance the customer experience.

McDonald forecasts sales of ¥200 billion, a ¥25 billion operating loss and a ¥38 billion net loss for 2015.