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  • McDonald's has always proved its doubters wrong.

  • The stock was tumbling at the turn of the century, as a new idea - preparing food to order - proved cumbersome.

  • The company closed old stores, stopped adding new ones, and rejected the menu.

  • It sold more breakfast food and coffee. It worked.

  • Then, sales stalled again.

  • Surely, the age of the burger had passed.

  • Nope. A new boss and a simplified menu got sales going again,

  • sparking a sharp rally in the shares in the latter half of last year.

  • Investors who have stuck with the shares have beaten the S&P 500 by a fat margin.

  • None of these happy comments apply to McDonald's publicly traded Japanese affiliate, however.

  • Its sales have fallen in every one of the last seven years.

  • Sales have been hammered in the last year or two, as one food quality scandal has followed another.

  • Sales have only just started to recover.

  • Net profit, which has never been very high, is expected to be barely positive this year.

  • What part of these struggles is down to Japan's aging population and chronic deflation?

  • And how much is failure to emanate the competitive agility of its protean parent company?

  • It's hard to say. But either way, the price investors pay for each dollar of sales at McDonald's Japan is very cheap relative to the parent.

  • Those who still harbor bullish feelings about Japan, where GDP growth estimates were nudged up this week, should find McDonald's Japan interesting.

  • Boss, Sarah Casanova, is in the midst of a shake up, hinging on menu tweaks, lower prices, and sprucing up the shops.

  • McDonald's Japan's nearly 3000 stores is a meaty 8% of the global total,

  • and the parent company has a 50% equity stake in it.

  • The parent is considering selling down the stake, but it will not want to do so while the company's value is depressed,

  • and whether it sells or not, it will not want to see its brand wither in a crucial market.

  • McDonald's Global, a proven winner across the decades, has good reason to support the Japanese turnaround.

  • Robert Armstrong, LEX.

  • Giles, you and I have spoken in the past about how apparent or real volatility in the pound, which is so often associated recently with Brexit, has been a bit exaggerated,

  • - Yeah. - And we've played it down.

McDonald's has always proved its doubters wrong.

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