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QSRs to benefit short-term from China currency move
June 21, 2010
Quick-service restaurant chains with a large presence in China will likely see a boost after that country said it would allow its currency to appreciate against the U.S. dollar, according to Businessweek.
Yum! Brands, with about 10 percent of its brands' stores in China, and McDonald's Corp., with about 3 percent of its locations in the country, are likely to benefit in the short term.
That news is counterbalanced by expectations that exchange rates for the Euro will negatively impact earnings per share for some brands, including McDonald's and Burger King. McDonald's said the company expects minimal impact in its second quarter but some impact for the year. Burger King Holdings expects the earnings cut to impact the fourth quarter of 2010 by 1 to 2 cents per share with a neutral to a slightly negative effect on earnings for the year.
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