McDonald's Is Doomed
You probably saw the story yesterday that McDonald's had yet another rough quarter, with sales down globally yet again. I didn't think it was worth blogging again after reading this part, but please indulge me before we get to the good stuff:
Shares of the fast-food company were up almost 5 percent in early trading. At midday, they remained 3 percent higher at $97.70 as investors shrugged off declines in quarterly earnings and sales.
McDonald's global sales at restaurants open at least 13 months fell a worse-than-expected 2.3 percent in the first quarter, and the company warned of another drop in April.
Net income tumbled 32.6 percent to $811.5 million, and revenue was down 11 percent at $5.96 billion.
No biggie -- Wall Street had already priced in another bad quarter, but maintaining confidence that new CEO Steve Easterbrook is busy working on a turnaround plan.
That was certainly my position (I'm not a shareholder) on the matter. Easterbrook would, I assumed, pare down the menu, maybe improve the beef, and (please! please! please!) put the beef tallow back into their formerly world-class french fries. "Wait and see" seemed to be the prudent thing to do before blogging one more time about McDonald's.
But I can tell you right now: McDonald's is almost certainly doomed. Or at the very least, Easterbrook is the wrong guy to head up the burger chain -- any burger chain, for that matter.
To understand why I've come to this conclusion, read the very next line from the story:
Easterbrook plans to unveil his plan for turning McDonald's into a "modern, progressive burger company" on May 4.
Now maybe I should withhold judgement until I see this plan next week. Maybe a bold headline like "McDonald's Is Doomed" is just the kind of baseless clickbait fear-mongering I try to resist indulging in.
But a progressive burger company? Really?