Question-and-Answer Session
Mary Kay Shaw
(Q&A Instructions) Your first question comes from Matthew Difrisco - Oppenheimer & Co.
Matthew Difrisco - Oppenheimer & Co.
You mentioned earlier in the call, you used the term that you’re recession resistant. Historically Europe has been a little bit more of a middle-class consumer and I would assume China and Asia, your experience is similar there. Do you think with the line-up and with the change of philosophy with how you are approaching growth in those markets, are you also recession resistant there or do you expect we will see a little more volatility, potentially, if these markets follow the trend of the U.S. consumer?
James A. Skinner
I commented a little bit on that in saying that we are seeing some slowdown in those markets today, relative to the economic issues and the financial crisis in the credit markets and consumer confidence, but we’re not seeing it at McDonald’s.
And we have continued to charge forward with our growth in China. For example, we are going to open 150 restaurants in China and next year we’re going to open more and we’re going to continue to open restaurants in Europe. And so we are confident that we will have the same strategic opportunity in those markets and continue to push forward, particularly with value and convenience, that will be able to show that we are as resistant in those markets, relative to recession, as we are in the United States.
Mary Kay Shaw
Your next question comes from John Glass - Morgan Stanley.
John Glass - Morgan Stanley
We have been in this unprecedented period of FX swings and two questions. Beyond the Euro/pound relationship, which you have highlighted and then sensitivity of earnings, is there material risks to other currencies moving against you and maybe could you quantify it.
And in talking about that, Latin America particularly seems to be an area of concern recently. Do you get paid in dollars for their royalties or are you paid in local currencies and is that a translation risk and is there any further risk beyond just the translation risk? Particularly related to Latin America?
Peter J. Bensen
I will answer the second part first. We get paid in dollars from Latin America. So our DL partner down there has all the currency risk. So another reason to do the transaction the way we did it.
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