Skinner was chosen on the basis of his company’s stock price and financial performance compared with others in its own industry group and all large companies traded on US markets. Only firms with market caps of more than $5 billion were considered. 24/7 Wall St. 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. A recession is supposed to pull everyone under, but that everyone does not seem to include McDonald’s (MCD). The fast food firm announced that that global comparable sales increased 7.7% in November. U.S. comparable sales increased 4.5%. McDonald’s attributed this to its breakfast and value meal offerings.
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 successfully markets itself as the best and fastest way to get good food before 8 AM.
Over the course of the last three years, McDonald’s has revolutionized the way it does business. It has expanded itself to a 24-hour, complete menu operation which serves everything from $.99 hamburgers to $3 premium coffees.
McDonald’s is doing well because it is no longer McDonald’s. It is several food retailers wrapped into one set of locations.
The credit for the marvelous changes goes to James Skinner.
Nominees: Apple (AAPL), JPMorgan (JPM), Kraft (KFT), Disney (DIS), Wal-Mart (WMT), McDonald’s (MCS), Monsanto (MON), Amgen (AMGN), Colgate-Palmolive (CL), IBM (IBM)
Douglas A. McIntyre