The Continuing Decline of McDonald’s

by James Corbett, The International Forecaster:

… on a positive note, we can take McFatfood’s woes as a sign that, try as they might with their considerable propaganda resources, the corporate chieftains can’t put their egg McMuffin back together again.

Long-time Corbett Reporteers might recall my 2015 video, “Celebrate! McDonald’s is Dying!” where I detailed the many, many woes the fast “food” giant was dealing with at the time, including: The first quarterly loss in the firm’s 38 years as a publicly traded company ($343.8 million). Its first full-year loss ($186 million) in Japan in 11 years. A 58 cent per share drop on the back of a global comparable sales drop of 3.3%.

Since then, McCancer’s has been undergoing a sweeping “restructuring” that has seen many layers of lipstick slapped on their factory-farmed pig. This restructuring includes not only cosmetic changes (“All-day breakfasts and new value menus for everyone!”) but behind-the-scenes efforts to trim $500 million from the company’s operating expenses, including buyouts and layoffs at company headquarters and the re-franchising of 4,000 corporate “restaurants.”

The global giant’s influential PR machine has used sleight-of-hand and other tricks to make this restructuring look like a smash success. They used their cheerleaders at the Wall Street Journal to hype “stronger-than-expected” profit and sales figures and their boosters at US News & World Report to hype some highly-selective earnings comparisons suggesting that this “turnaround” is, to use the WSJ’s phrase, “sustainable.”

But one doesn’t have to scratch too hard to reveal the rusty reality beneath this PR paint job.

McPinkslime’s might have “beat expectations” for sales and profits, but beating diminished expectations is hardly a sign of booming business. Just look at the nuts and bolts of the Q3 2016 earnings report: Year-on-year revenue is down 2.9% and net income is down 2.6%. And keep in mind, those numbers are in comparison to the already-terrible 2015 figures.

And that “re-franchising” operation? It cost $130 million in pre-tax charges.

But don’t worry, everyone, they “beat expectations!” Pay no attention to the hemorrhaging corporation behind the curtain!

And now the latest sign of McDonteat’s global retreat (via Corbett Report member “BuddhaForce”): “McDonald’s gives up control of its China business in $2 billion deal.”

The story is fascinating enough in its own right, what with McDonteats throwing in the corporate towel on the largest and fastest-growing consumer market in the world. But the devil is, as always, in the details. Who is purchasing the majority stake in the company’s mainland operations? None other than The Carlyle Group and CITIC Group.

Read More @ TheInternationalForecaster.com