By Waylon Cunningham
Aug 4 (Reuters) - McDonald's replaced the head of its U.S. business on Tuesday after the company missed second-quarter U.S. sales-growth expectations, blaming what its CEO called execution lapses that blunted a drive to bring back low-income consumers who have cut back on eating out.
The Big Mac maker named Skye Anderson, a 26-year company veteran who has served as U.S. chief operating officer, to replace Joe Erlinger as president of McDonald's USA, effective immediately.
CEO Chris
Kempczinski on the earnings call described Anderson as a "change agent" who could "unlock superior performance" in the U.S.
Erlinger, who joined the company in 2002 and has been president of McDonald's USA since 2019, will stay on as an advisor to help with the transition until early 2027, McDonald's said in a statement.
Anderson will oversee roughly 14,000 restaurants in the United States, the company's largest market, as she steers the rollout of McDonald's new turnaround strategy called "McDonald's > NEXT."
Some on Wall Street read the leadership shake-up as a sign of impatience at the top. Citi analysts said the appointment signals management's dissatisfaction with recent performance and could pave the way for faster execution of sales and profit growth initiatives.
TD Cowen analysts wrote that the firm looks forward to Anderson's plans to reaccelerate customer traffic and improve franchisee cash flow at the company's investor meeting set for September, citing Anderson's lengthy tenure at the company.
McDonald's said in a statement alongside the announcement that the swap follows a plan initiated earlier in the year. Anderson became U.S. division chief operating officer in April.
U.S. same-store sales grew 0.8% in the quarter, below Wall Street expectations and driven by an increase in the average amount of money spent by each customer, the company reported.
Kempczinski praised Erlinger's record steering the U.S. division through major changes, as well as delivering gains in digital ordering and delivery.
But Kempczinski also criticized U.S. division leadership.
"We don't have a strategy problem, we simply didn't execute at the level we needed to in the second quarter," Kempczinski said on the earnings call.
Kempczinski said a heavy calendar of promotions — such as its "K-Pop Demon Hunters" tie-in, new value meal offerings and FIFA-related promotions — overwhelmed restaurant crews and led to dissatisfied customers who waited too long for their food. He also said the marketing campaigns were too crowded together.
"It's tough to break through when you have that many messages out there," Kempczinski said, adding that the company is "taking a really hard look at the calendar through the balance of the year."
Kempczinski also said it was a mistake to cut digital discounts while deploying a new under-$3 menu that failed to bring in enough new sales, which he said explained two-thirds of the company's sales miss. Kempczinski said fixing this "bad trade" would be a focus for Anderson over the next two quarters.
Anderson's rise caps a long McDonald's career that has spanned finance roles, including chief financial officer of McDonald's Australia, before she joined McDonald's USA in 2017. She most recently served as chief operating officer of McDonald's USA and led its Global Business Services unit before that.
During his tenure, Erlinger sought to reassure the public about McDonald's food safety after a 2024 E. coli outbreak tied to the company's burgers that led to one death and around 100 reported infections. The same year, he also penned an unusual public letter responding to what he said were viral but untrue claims about runaway menu price increases.
(Reporting by Waylon Cunningham in New York; Editing by Will Dunham)
