McDonald’s Corporation (MCD) CEO Don Thompson Says Steps Are Being Taken To Regain Sales Momentum


Mcdonalds Food

McDonald’s Corporation (NYSE:MCD) President and CEO, Don Thompson, has got a lot of work to do to regain lost glory. The food scandal in China last year and in Japan along with activist investors’ pressure has placed the company under severe stress in the December quarter. It could be a Herculean task to bring back the lost momentum.

Accelerated Efforts

However, the McDonald’s Corporation (NYSE:MCD)’s CEO expressed his confidence that the company would be able to regain lost sales momentum, market share and guest counts. He has indicated that the company was already taking concrete decision involving foundational enhancements in big markets. Aside from this, he pointed out that the company was making continuous efforts to recover from the unusual events.

The company’s CEO said that it was taking accelerated efforts to capitalize on the investments made in its technology, as well as, in restaurants to bring a better future experience to the life of its customers. He also reiterated its commitment to fuel sustained but profitable growth for every stakeholder.

4Q Results

McDonald’s Corporation (NYSE:MCD) reported that its net income dropped 21% to $1.1 billion from $1.4 billion. Similarly, earnings fell 19% to $1.13 a share from $1.40 a share in the year-ago quarter. Results included 9 cents towards unfavorable impact on supplier issue. Excluding the impact, it would have earned $1.22 a share, which was one cent lower than the Capital IQ estimation of $1.23 a share.

The company’s top line dropped 7.3% to $6.57 billion from $7.09 billion in the previous year quarter. Capital IQ expected McDonald’s to generate revenue of $6.7 billion. Sales from company owned restaurants dropped 9% to $4.3 billion while revenue from franchised restaurants slipped 3% to $2.28 billion. Comparable store sales dipped 90 basis points due to weak traffic across the segments.

January Comps

Thompson said that its business continued to face consequential headwinds. McDonald’s Corporation (NYSE:MCD) said that it would focus on adapting to the changing marketplace in the next one-year period and maximize the potential. The company expects comparable sales in January to be negative, and the results would continue to face pressures, especially in the first two quarters.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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