McDonald's names new U.S. head after Q2 miss

McDonald’s replaced the head of its U.S. business as it reported slower domestic sales growth for the second quarter and acknowledged execution problems in its largest market. The company said on August 4 that Skye Anderson will become president of McDonald’s USA, succeeding Tariq Hassan, who is leaving after nearly four years in the role. McDonald’s reported U.S. comparable sales growth of 0.8% for the quarter ended June 30, below the 1.4% gain analysts had expected for the U.S. business, according to Yahoo Finance. CEO Chris Kempczinski said the company saw “an opportunity to raise the bar in the U.S. and accelerate performance in our largest market.” ### Who is taking over McDonald’s U.S. business? Skye Anderson was named president of McDonald’s USA effective August 4, the company said in its second-quarter results announcement. McDonald’s said Anderson had been serving as president of McDonald’s Canada and previously held U.S. field and operations leadership roles inside the company. Tariq Hassan is departing after leading the U.S. business for nearly four years, according to McDonald’s and Yahoo Finance. (corporate.mcdonalds.com) Hassan had been a visible public face of the company’s U.S. marketing and menu strategy during a period that included inflation-driven pressure on restaurant traffic and renewed emphasis on value offers. ### What did the quarter show in the United States? McDonald’s said U.S. comparable sales rose 0.8% in the second quarter, a sharp slowdown from the prior quarter’s stronger domestic growth. Yahoo Finance reported that the result slightly missed Wall Street expectations as consumers contended with a tougher economic backdrop. (finance.yahoo.com) Global comparable sales increased 1.3% and systemwide sales rose 4% in constant currency, the company said. Net income rose 5% to $2.36 billion and revenue increased 4% to $7.09 billion, according to McDonald’s results and other reports published after the release. ### What did McDonald’s management say went wrong? Chris Kempczinski said on the earnings call that the company was acting with urgency to address U.S. operational and marketing issues. (finance.yahoo.com) Yahoo Finance’s earnings-call summary said management described the domestic business as facing execution missteps even as international markets remained stronger. McDonald’s said in its release that it had “acted decisively to strengthen execution” and that the company wanted to accelerate performance in the United States. (corporate.mcdonalds.com) That language accompanied the leadership change and positioned the move as part of a broader effort to improve operations in the market that contributes a large share of profit. ### Why is menu strategy part of this story? (finance.yahoo.com) Business Insider reported that McDonald’s has been rethinking its U.S. value menu as it tries to improve sales momentum. Yahoo Finance said the company is in a period of revisiting menu strategy while consumers remain price-sensitive and traffic trends remain under pressure. (corporate.mcdonalds.com) MSN’s summary of the quarter said higher average checks helped offset falling guest counts in the United States, pointing to a mix issue where price and product mix supported sales even as visits weakened. That dynamic has become central for restaurant chains trying to protect margins without losing lower-income customers. (finance.yahoo.com) ### What comes next under the new U.S. leadership? August 4 marked the start of Anderson’s tenure running McDonald’s U.S. business, and the company’s next test will be whether domestic traffic and comparable sales improve in coming quarters. McDonald’s said it remains focused on execution and long-term growth, while investors will likely look to the next earnings call and corporate disclosures for details on changes to menu, value and operations in the United States. (msn.com) (corporate.mcdonalds.com)