McDonald’s new chief to announce turnaround plan on 4 May
23 Apr 2015
McDonald's Corp's new chief, Steve Easterbrook, who is tasked with reviving the struggling restaurant chain, on Wednesday said he would deliver his turnaround plan next month.
In his first quarterly conference call with investors and analysts, Easterbrook claimed to be a "champion of simplicity" who valued personal accountability and "progress over perfection." He took charge on 1 March following one of McDonald's most dismal years on record.
Shares of the fast-food company rose almost 5 per cent in early trading and at mid-day they stood 3 per cent higher at $97.70 as investors chose to overlook drops in quarterly earnings and sales.
McDonald's global sales at restaurants open at least 13 months were down worse-than-expected 2.3 per cent in the first quarter, and the company warned of another decline in April.
Net income fell 32.6 per cent to $811.5 million, while revenue dropped 11 per cent at $5.96 billion.
Easterbrook is set to unveil his plan for turning McDonald's into a "modern, progressive burger company" on 4 May.
"Folks hoping for a near-term rise in the stock may be hanging their hat on hopes that McDonald's can spark some pizzazz in investors that day," Janney Montgomery Scott analyst Mark Kalinowski wrote in a note.
Easterbrook told analysts that change was urgent -- and imminent. He said as a retail business McDonald's needed to be more customer-centric.
Even as he said McDonald's would challenge conventional thinking on multiple fronts, he refused to divulge any details of the turnaround plan.
According to commentators, McDonald's needed a turnaround urgently as for nearly two years, the chain had seen its stock decline even as its same-store sales, particularly in the US market, had been falling.
The company had ended up playing catch-up to much of the fast-food industry, as it tried to improve the quality of its food and fix its broken brand image.
According to industry analysts change was long overdue, especially on the quality side of McDonald's menu offerings.
McDonald's needed products and marketing geared around health and wellness, according to Jack Russo, analyst at Edward Jones, USA Today reported. He added, if one looked at Chipotle and Panera, it was all about organic and natural. He said McDonald's could still be McDonald's and do that.
