McDonald’s Corp. (MCD) Chief Executive Officer Jim Skinner is retiring after almost eight years running the world’s largest restaurant chain and will be succeeded by Chief Operating Officer Don Thompson.
The resignation takes effect June 30, Oak Brook, Illinois- based McDonald’s said in a statement yesterday. Skinner will also retire from the board, where he serves as vice chairman. Thompson, 48, who became president and operating chief in January 2010, will assume his new role July 1.
“It will be a seamless transition,” Peter Saleh, an analyst at Telsey Advisory Group in New York, said in an interview last night. “They’re not going to skip a beat going from Jim to Don,” he said.
Skinner has overseen a tripling of the Big Mac seller’s stock since he took the helm on Nov. 22, 2004, making it the best performer in the Dow Jones Industrial Average since then. Under Thompson, the company will need to keep growing McDonald’s sales and profit in the face of increasing competition and higher commodity prices.
“Everyone today is trying to steal share from them,” Saleh said. Thompson needs to protect the breakfast business and continue to expand McCafe specialty beverages, he said.
Wendy’s Co. and Yum Brands Inc. (YUM)’s Taco Bell chain have recently been testing breakfast foods at some U.S. locations. Burger King Holdings Inc. (BKC) also began selling soft-serve ice cream and more upscale menu items last year in a bid to lure McDonald’s diners.
As well as an uncertain economic outlook, restaurant operators are enduring higher commodity costs. Raw ingredient- prices may rise as much as 5.5 percent in the U.S. and 3.5 percent in Europe in 2012, Chief Financial Officer Peter Bensen said during an earnings call on Jan. 24.
Skinner, 67, started at McDonald’s as a management trainee in 1971. Thirty-three years later he became CEO, the company’s third in seven months, taking over from Charlie Bell who resigned to focus on his fight against cancer. In April 2004, then CEO James Cantalupo died of a heart attack.
Revenue at McDonald’s, which has more than 33,500 stores worldwide, of which about 80 percent are franchised, has jumped 42 percent since 2004. It posted revenue of $27 billion in 2011. Analysts forecast revenue will grow 5.3 percent to $28.4 billion, according to data compiled by Bloomberg.
McDonald’s fell 93 cents to $96.72 on the New York Stock Exchange yesterday, before the announcement was made. The shares have declined 3.6 percent this year.
Thompson, a 22-year veteran who started as an electrical engineer, was president of McDonald’s USA from 2006 to 2010, before he became operating chief.
“No decision is being made now” on who will fill the COO position, Lisa McComb, a McDonald’s spokeswoman, said in an e- mail last night. “We have operated in the past with and without a COO.”