On the bright side, the company plans to hike the menu prices in the second half of the year which could help reverse this trend and widen the margins.
Private investment should be further stimulated when the fear of future yen appreciation declines, and the constraint on new bank-lending diminishes as bank profit-margins widen.
So rather than taking advantage of cheap sterling to shift vastly more product and invest to increase capacity, they are increasing their dollar prices to widen their profit margins and boost cash flow.
The company has reported double-digit profit growth every quarter for two and a half years now, and it just raised guidance for full-year earnings because it expects profit margins to widen further.
He thinks margin pressure in North America may persist for some time, but he believes margins from its international operations will continue to widen in the current oil environment.