McDonald's CEO releases turnaround plan, stock dips

By Lisa Baertlein

REUTERS - McDonald's Corp's new chief executive officer on Monday laid out a turnaround plan that includes reorganizing the company's operating units, selling more restaurants to franchisees and cutting costs.

Investors gave it a cool reception, sending shares down 1.4 percent to $96.45 in premarket trading.

Expectations were high ahead of the announcement from CEO Steve Easterbrook, who has vowed to lure back customers, boost sales and transform the world's biggest restaurant chain by revenue into a "modern, progressive burger company."

McDonald's new operating segments are United States, international lead markets, high-growth markets and foundational markets, or smaller countries. The company currently organizes its business by geography.

The company plans to sell 3,500 restaurants to franchisees by 2018, taking global franchisee ownership to 90 percent from 81 percent. McDonald's prior plan called for selling 1,500 restaurants to franchisees by 2016.

Easterbrook said he will remove "cumbersome" management and scour for inefficiencies. The moves are expected to result in about $300 million in net annual savings, most of which will be realized by the end of 2017.

Easterbrook also said he plans to improve food quality and service.

"I will not shy away from the urgent need to reset this business," said Easterbrook, who took the helm on March 1, following one of McDonald's most dismal years on record.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Alden Bentley and Jeffrey Benkoe)