McDonald's CEO acknowledges image problems after tough results

Tue Oct 21, 2014 6:55pm EDT
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By Lisa Baertlein

(Reuters) - McDonald's Corp (MCD.N: Quote) Chief Executive Officer Don Thompson owned up to some corporate image problems on Tuesday after it posted a nearly one-third drop in quarterly profit and warned that its global restaurant sales would fall again this month.

Stock in the fast-food chain, which Thompson conceded is sometimes seen as little more than "a manufacturing plant," was down 0.6 percent at $91 in afternoon trading after reporting a 30 percent fall in third-quarter net income to $1.07 billion and traffic declines in every major region.

Thompson, who has been CEO for just over two years of his 25-year career at McDonald's, said the company that now serves some 70 million customers a day worldwide has at various times during its history faced questions about whether it is still relevant to consumers, who are now craving more fresh, unprocessed food.

"McDonald's is in the business of satisfying customers and that will never fall out of favor. The question is what do you do to do that?" Thompson asked Reuters in a telephone interview.

McDonald's has posted a string of disappointing results, due to uncontrollable factors and internal missteps, since Thompson took the helm in July 2012.

Wall Street analysts, many of whom underscore McDonald's deliberate business style, predict that the company will give Thompson at least a year to move the needle.

To that end, Thompson said McDonald's is simplifying menus, tailoring food to local tastes, offering custom burger and sandwich options, rolling out mobile services such as payments and ordering, and opening a social media "dialogue" with customers.

Technology has made customized ordering simpler and will give McDonald's the opportunity to showcase its fresh produce and other ingredients, Thompson said.   Continued...

A McDonald's restaurant is pictured in Encinitas, California September 9, 2014. REUTERS/Mike Blake