The result was about as satisfying as a Big Mac, only without the two all-beef patties, special sauce, lettuce, cheese, pickles or onions. Investors sent the fast-food giant's stock down about 1.7% to close at $96.13. The company's shares continued to trend downward Tuesday morning, as the disappointment over the revamp blueprint set in and two ratings agencies raised red flags about the effects of the company's plans on its debt burden.
The stock closed Tuesday at $96.13, unchanged.
The plan's essential ingredients included cutting net costs by $300 million a year, re-franchising 3,500 of the 6,700 restaurants McDonald's directly owns and reorganizing the company into four divisions. To shareholders and industry watchers who were expecting a comprehensive restructuring of the business, including improvements to McDonald's much-maligned menu, the proposals had all the appeal of a stale sesame-seed bun.
The centerpiece is the reorganization. The first of the four divisions would be comprised of only the U.S., while the second would include the established markets of Australia, Canada, France, Germany and the U.K. A third division would constitute high-growth markets such as China, Italy, Poland, Russia, South Korea, Spain, Switzerland and the Netherlands. A fourth division would include all of McDonald's other markets and would be 100% franchised.
The company also plans to lever up to return between $8 billion and $9 billion to shareholders. This suggestion prompted Standard & Poor's Ratings Services to downgrade the company and Moody's Investors Service to put it on review.