McDonald’s suspends buybacks, leaves dividend policy unchanged: CEO to CNBC

(Reuters) – McDonald’s Corp has suspended share buybacks to help it navigate thorough the coronavirus crisis, but has not changed its dividend policy, Chief Executive Officer Chris Kempczinski told CNBC https://www.cnbc.com/2020/03/20/mcdonalds-suspended-its-15-billion-buyback-program-several-weeks-ago.html?__source=twitter%7Cmain in an interview on Friday.

In January, the fast-food chain declared a quarterly cash dividend of $1.25 per share of common stock payable on March 16.

McDonald’s had raised its dividend by 8% to $1.25 in September, equivalent to $5 annually. The company has raised its dividend for 43 consecutive years since paying its first one in 1976.

Restaurants in the United States have been forced to shut doors or limit to delivery and take-away in efforts to curb the spread of the highly contagious coronavirus, which has taken the lives of over 200 in the country.

McDonald’s has already moved to defer rent for its operators and close all dine-in operations.

Peer Starbucks has also shifted to a similar delivery model, while others like sandwich chain Subway and fast-casual chain QDOBA have deferred or lowered the royalty fee they collect from operators.

Kempczinski told CNBC the company has not yet seen a breakdown in its supply chain globally and that it would plan for growth in delivery after the crisis.

In China, the epicenter of the virus, McDonald’s has reopened 95% of its restaurants, Kempczinski said in the interview.

The company was not immediately available for comment to a Reuters request.

(Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur and Maju Samuel)