SAN FRANCISCO (TheStreet) -- McDonald's (MCD) - Get McDonald's Corporation (MCD) Reportannounced late Wednesday CEO Don Thompson will be retiring effective March 1. The move is not surprising, given the financial struggles McDonald has endured of late with sagging sales in the U.S. and internationally.
Thompson, who has been a McDonald's employee for nearly 25 years, will be replaced with insider Steve Easterbrook, McDonald's chief brand officer and a senior executive vice president. Easterbrook will also assume Thompson's spot on the board of directors effective March 1.
"Steve is a strong and experienced executive who successfully led our U.K. and European business units and the Board is confident that he can effectively lead the company to improved financial and operational performance," said Andrew McKenna, non-executive chairman of McDonald's board of directors, in a statement.
As for Thomson, McKenna stated: "On behalf of the Board I sincerely thank Don for his valuable contributions and outstanding service throughout his career at McDonald's. We will be indebted for his passionate leadership, business acumen, dedication and system knowledge."
Thompson, in a statement, said he is "truly confident as I pass the reins over to Steve, that he will continue to move our business and brand forward."
And that is exactly what McDonald's needs. When it reported its quarterly results last week, McDonald's delivered less revenue than Wall Street was expecting. The company generated revenue of $6.57 billion while Wall Street had been expecting $6.68 billion.
But more important and telling is same-store sales at its U.S. restaurants fell for a fifth consecutive quarter. Sales at its restaurants that were at least a year old dropped 1.7% overall compared to the same time last year. Additionally, foot traffic to its restaurants last year fell 3.6% worldwide and 4.1% domestically.
Faced with a shift in consumers' attitudes toward their fast-food choices, McDonald's has tried to retool its operations to accommodate patrons who desire healthier fare and quicker lines. As a result, McDonald's has launched an advertising campaign to tout its food quality and pared its menu to eliminate slow selling items that not only eats into its bottom line but can also slow the decision making process among patrons and create longer lines.
The CEO changes are part of a wider management change at the ailing fast-food chain. McDonald's also announced Chief Financial Officer Pete Bensen will be promoted to the newly created position of chief administrative officer. In this position, Bensen will oversee a number of functions that aid the company's operations.
Bensen will be replaced as CFO by Kevin Ozan, who is currently the corporate controller and a senior vice president.
McDonald's stock in after-hours trading was up 3.4% to $91.75. During the regular session, the stock closed down 0.88% to end the day at $88.78
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.