What's wrong with McDonald's?
After a stellar 2011, America's favorite fast food chain has struggled throughout 2012. What will 2013 bring?
Following a great 2011, McDonald's (MCD) has been one of the Dow's worst performers of 2012. Year-to-date, shares of McDonald's are down more than 9.7%.
The shares are off their recent lows, but remain well below the 52-week high of $102.22. A number of factors seem to be weighing on the fast food giant.
Most recently, on Wednesday, McDonald's was forced to respond to a report by China Central that chicken it sold in its Chinese stores may have been fed indiscriminate amounts of antibiotics and growth hormone.
On Monday, Reuters reported that McDonald's leadership was urging its franchisees to keep their stores open on Christmas Day. This is a break from the company's traditional policy of closing on major holidays.
In a company memo Reuters obtained, management noted that McDonald's stores that remained open on Christmas averaged sales of $5,500. Given that most restaurants are closed for the holiday, impressive Christmas sales seem intuitive given the lack of competition.
Is it a sign of desperation, or just a part of a greater business trend? Wal-Mart (WMT) drew the ire of some employees in November when it moved up the time it would open to 8 p.m. Thanksgiving night.
Analysts at Bank of America don't think openings could add much to the company's top lines, noting, "We do not view incremental openings on Thanksgiving this year as a primary factor behind a surprisingly good 2.5% U.S. same store sales increase for the month of November. Likewise, we are not anticipating that more Christmas restaurant openings this year will have much impact on December results."
The biggest issue with McDonald's is likely the company's exposure to Europe, which is significant. As Europe has struggled, McDonald's performance in the region has been weak. Yet, should the European economy begin to recover next year, that could create a tailwind helping to support shares of McDonald's in 2013.
Shares of McDonald's traded about flat on Thursday, at $89.72.
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If you are hungry and McDonald's seems like the only alternative -
tis' better not to eat at all and remain hungry than to dip into McTerrible...
everyone runs to the movie theatres on thanksgiving and christmas day !!!! so why the big deal ?? if u truly have a beef then dont even go to the movies specially since the theatres treat the employees worse than any retailer on any holiday !!!!
You can bet that way more than half of the orders placed at McD's if filled incorrectly. I was lured back in recently by a very tastey looking sandwich, the CBO, which stand for Cheddar Bacon Onion. First.... it looked nothing, and I do mean nothing like the adds. This pathetic sandwich was over priced and there was nothing on it. They even forgot the bacon. How does that happen. As to being open on Christmas. Consider me done.
21st Century Business Credo:
Screw the employee.
Screw the customer.
Profits Over Quality.
Pay As Little Taxes As Possible.
Return On Investment is No. 1.
I've contacted McDonald's corporate office about poor service, inacurate orders, several orders that had one food type look like it was picked up off of the floor and placed in the container, no maple syrup in a pancake order, and the list can go on.
Corporate thanked me for the feedback and assured me that they would forward my comments to the local, offending, McDonalds. Later they sent an email and asked if I was satisfied with the follow-up from the local store. I replied that I had not heard from the local manager, at all. That was the last communications from McDonalds corporate. They are definately in a downward spiral! They had a good run. Time for them to go away.
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Consumers are very status conscious in Asia, Africa and other emerging-market areas. This is especially true in China.
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