24/7 Wall St. will name its annual CEO of the Year next week. The executive will be picked from a field of ten which we will profile this week
The CEOs are chosen on the basis of their company’s stock market and financial performances compared with their own industry groups and all large companies traded on US markets. Only firms with market caps of more than $5 billion were considered. 24/7 reviewed revenue growth, operating margins, balance sheets, return on assets, and return on equity.
McDonald’s is not in a recession proof business. It is not even in a business that Wall St. loves. People with less and less money in their pockets may go to inexpensive restaurants, but, in many cases, they don’t go at all.
Shares of Yum (YUM) and Burger King (BKC) are off as much as the DJIA over the last year. Shares in Starbucks (SBUX), which is hardly a direct MCD competitor, are off by 60%. McDonald’s trick is that it has flanked them all both in US and overseas, which is why its shares have traded flat compared with twelve months ago.
McDonald’s has been known as a place for lunch and dinner for decades. It is remarkable the extent to which is has expanded its breakfast menu from a few sandwiches to a broad array of meals and coffees. The company now effectively markets itself as the best and fastest way to get good food before 8 AM.
Despite its size McDonald’s keeps growing. Comparable store sales rose 8.2% in October.
James Skinner had to live through three CEO changes over the last five years. Due to tragedies, he ended up running the company. Through an impressive transformation of what McDonald’s offers customers and how it markets its products, Skinner has put a huge distance between his company and its competition.
Douglas A. McIntyre