Special Report

The 10 Most Hated Companies in America

1. McDonald’s

McDonald’s (NYSE: MCD) was at the center of the most significant labor movement of 2013. The company has, between its owned and operated stores and franchises, hundreds of thousands of employees who earn barely more than the minimum wage. A recent study conducted by the National Employment Law Project (NELP) found that McDonald’s employees rely more on public assistance programs than any other large fast-food company, with an estimated $1.2 billion in costs to the public.

Making matters worse, McDonald’s advised some of its employees to sell their possessions to make-up for holiday spending debt. Recently, the fast food chain’s hotline designated to help its workers live on their modest incomes encouraged employees to apply for food stamps. Low wages may be why the fast-food giant scored just 73 in the American Customer Satisfaction Index, the lowest in the limited service restaurant.

McDonald’s poor revenue growth this past year can be explained in part by unfavorable economic conditions. Global same-store sales rose by only 0.9% in the third quarter. McDonald’s pays a substantial dividend and has share buyback programs, but its stock rose only 5% in the past year compared to 25% for the S&P 500.

2. Abercrombie & Fitch

Long-time Abercrombie & Fitch (NYSE: ANF) CEO Michael Jeffries is often referred to as the “modern founder” of the decades-old clothing line. But he became the subject of controversy when comments he made in 2006 about who the company wishes to see as its core customers recently surfaced. The comments implied that the teen retailer is looking to attract what he refers to as the “cool kids” and aims to avoid overweight customers. Still, he has the backing of the board. In response to an attempt by activist shareholder group Engaged Capital to force him out, the board gave Jefferies a new contract.

But the investment firm may have good grounds for dissatisfaction. Jeffries has made $79 million over the last three years. Meanwhile, the company’s stock has underperformed the S&P 500 in the last five and is down 30% in the past year. Investors have punished the stock as revenue and earnings have declined. In its last reported quarter, Abercrombie announced that revenue dropped to $1.03 billion from $1.17 billion the year before. The company had a net loss of $15.6 million compared to a profit of $84 million in the same period the year before.

ALSO READ: The Worst Product Flops of 2013

3. Electronic Arts

Leading game maker EA (NASDAQ: EA) has recently hit some serious roadblocks. The company’s highly anticipated SimCity reboot was by all accounts a public relations disaster. The game servers failed to function for nearly a week after the launch, which meant consumers couldn’t play the game for a week after they purchased it. The company eventually offered a free game to anyone who had purchased SimCity in the early days.

One of the free games offered was Mass Effect 3, another release that tarnished the company’s brand. Critics and gamers widely criticized the ending of the third installment of this very successful game as unsatisfying. The backlash was so severe that the company eventually released a free alternate ending. And there may be more troubles ahead. EA is having problems with yet another bug-filled launch, the fourth installment of the Battlefield franchise.

On top of this, investors are suing the company for allegedly making misleading statements about the game’s launch and overstating its success. It’s perhaps not surprising then that, once again, The Consumerist labeled EA the “Worst Company in America” last year — the first company ever to earn the dubious distinction two years in a row.

In March, EA CEO John Riccitiello resigned. While company shares have performed relatively well, there is recent cause for concern. Last quarter, the company reported a loss of $273 million.

4. Sears Holdings

Sears Holdings (NASDAQ: SHLD) is the parent corporation of retailers Sears and Kmart — both notorious underperformers. Investors have lost trust in controlling shareholder and chairman Eddie Lampert, whose poor management and decision-making has caused the company to shrink. Only 17% of the company’s workers approved of Lampert’s performance, according to Glassdoor.

Sears was also ranked among the worst companies to work for last year, according to an analysis of Glassdoor data by 24/7 Wall St. Employees rated it a 2.5 out of 5, among the lowest marks awarded to a company of that size. This may be why the ACSI gave Sears a lower customer service score than every retailer in the industry, except for Walmart.

In the third quarter of 2013, Sears Holdings posted a net loss of $534 million compared to a loss of $498 million in the same period the year earlier. More recently, comparable store sales fell by 7.4%, the result of a 5.7% decline at Kmart and a 9.2% decrease at U.S. Sears stores.

As is the case at many of the country’s largest retailers, Sears and Kmart are among the largest employers of low-wage workers in the country, according to analysis by 24/7 Wall St. in collaboration with NELP.

5. DISH Network

Subscribers aren’t impressed with DISH’s (NASDAQ: DISH) customer service. DISH earned a spot in MSN’s 2013 Customer Service Hall of Shame largely because of its aggressive sales tactics. Customers also complained about confusing contracts and unreasonable cancellation fees.

DISH is not the only company in the industry that customers despise, however, it reaps additional notoriety because of its relationship with its employees. Based on a 24/7 Wall St. analysis of Glassdoor data, DISH was rated as the worst company to work for last year.

Chairman Charles Ergen holds a controlling interest in the company. GMI Ratings, which rates corporate governance on publicly traded companies, warned that his personal investments might present a conflict of interest with DISH shareholders. A GMI Ratings analyst cautioned that “These are things to be concerned about because they raise reasonable questions about conflicts of interest and the overall integrity of governance at the company.”

Shareholders, on the other hand, have reason to be happy: DISH’s stock is up more than 50% in the last year, and more than 325% in the past five years.

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