They weren't lovin' him. McDonald's CEO out after sales slump

Chief executive officer Don Thompson will leave McDonald's at the end of February and be succeeded by chief brand officer Steve Easterbrook. -- PHOTO: REUTERS
Chief executive officer Don Thompson will leave McDonald's at the end of February and be succeeded by chief brand officer Steve Easterbrook. -- PHOTO: REUTERS

NEW YORK (REUTERS) - McDonald's Corp, fresh off one of its worst financial years in decades, on Wednesday said chief executive officer Don Thompson would leave at the end of February and be succeeded by chief brand officer Steve Easterbrook.

Shares in the world's biggest fast-food chain, which have been underperforming major markets and several peers, jumped 3.2 per cent in extended trading following the news.

Mr Thompson, the 51-year-old former president of McDonald's USA who took the global helm in July 2012, had the challenge of adding to nearly nine years of sales gains at established restaurants.

But the following September, McDonald's reported a decline in same-store sales as it fought to hold on to customers with changing tastes and amid external pressures ranging political and economic turmoil in Europe to food safety scares in China.

"I don't think it was too much of a surprise. Maybe in the timing but not the action," Sanford Bernstein analyst Sara Senatore said. "This has been something that people have been talking about for a while."

McDonald's warned last week that business would be weak in the first half of 2015 and said it would cut its annual construction budget to the lowest in more than five years as it opens fewer restaurants in struggling markets.

The fast-food chain is also under pressure in the United States from a surge in competition from upstarts such as Five Guys Burgers and Fries, Chipotle Mexican Grill and other smaller, regional food outlets which are seen as offering fresher and higher quality products.

Mr Easterbrook, who has been with the company since 1993, has also served as president of McDonald's Europe.