McDonald's replaces CEO after poor sales

Fast-food giant McDonald's has replaced president and chief executive Donald Thompson, after the company turned in another poor quarter of sales and earnings last week.

McDonald's board of directors said yesterday that it had chosen senior executive vice president Steve Easterbrook to replace Thompson, voicing confidence he "can effectively lead the company to improved financial and operational performance."

The decision came five days after the company reported a 2.4% decline in revenues last year and a 19% drop in earnings per share, with falls in store traffic in all regions.

With 36,000 outlets in over 100 countries, the burger chain has been challenged by changing consumer tastes, agile new fast-food chains and a slump in sales in China and Japan after supplier issues sparked a scare over food safety.

It remains the world's largest burger chain, with $27.4 billion in revenues last year, and net income of $4.6 billion, down 15% from 2013.

But after aggressively investing and expanding in numerous markets to fight back against rivals, McDonald's said last week that it would reduce capital investment and cut back on store openings this year "to regain business momentum" and improve profitability.

The board said in a statement that Thompson, a 25-year veteran of the company in his third year as chief executive, was retiring effective March 1.

"I am truly confident as I pass the reins over to Steve that he will continue to move our business and brand forward," Thompson said in a statement.

Andrew McKenna, McDonald's board chairman, called Easterbrook, also the company's chief brand officer, "a strong and experienced executive who successfully led our UK and European business units."

"McDonald's is an outstanding company with talented employees and these management changes are aimed at speeding the company's movement to its next phase of innovation and growth," he said.