McDonald's CEO Steps Down Amid Declining Sales--4th Update

By George Stahl 

McDonald's Corp., struggling amid declining sales and menu changes, said Don Thompson would step down as president and chief executive, effective March 1.

The fast-food chain will replace Mr. Thompson with Steve Easterbrook, who was the company's chief brand officer. Mr. Easterbrook also will join the board of directors, replacing Mr. Thompson.

In a statement, Mr. Thompson said Wednesday, "It's tough to say goodbye to the McFamily, but there is a time and season for everything."

Shares of McDonald's, which have fallen nearly 6% over the past year, rose 3.2% in after-hours trading.

McDonald's is battling economic hurdles, changes in consumer tastes and its own menu missteps, all of which led customer traffic last year to fall 3.6% globally, including a 4.1% drop in the U.S., its most important market. The company last week reported a 21% drop in fourth-quarter earnings.

On McDonald's conference call last week, Mr. Thompson said, "We're changing, and we're doing it aggressively. However, it will take time, especially in our larger markets, for customers to notice the comprehensive changes that are under way."

The restaurant still expects January same-store sales to decline.

McDonald's has said its broad and complicated menu slows service, and that it has lost touch with younger consumers, who are trading their Big Macs for seemingly healthier, fresher options like those at Chipotle Mexican Grill Inc. It also is losing customers to more upscale sandwich rivals such as Five Guys Holdings LLC and Chick-fil-A Inc.

This month, McDonald's launched a new marketing campaign in the U.S. with commercials and food packaging designed to refresh its longtime "I'm lovin' it" slogan, under Chief Marketing Officer Deborah Wahl, who joined in March, and McDonald's U.S.A. President Mike Andres, who took over in October.

Mr. Easterbrook led McDonald's efforts to elevate its marketing, advance menu innovation, and create an infrastructure for its digital initiatives. He previously served in leadership roles across the company's global business, including president of McDonald's Europe.

In addition, McDonald's named Pete Bensen to the newly created role of chief administrative officer, overseeing the company's operations. Mr. Bensen had been chief financial officer. Kevin Ozan, who currently serves as corporate controller, will succeed Bensen as chief financial officer.

The moves by Mr. Bensen and Mr. Ozan also will be effective March 1.

Write to George Stahl at [e-mail]

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