McDonald's Corp. will stick with a much-criticized discount "Dollar Menu," the fast-food giant's new chief executive said Thursday in a debut address that Wall Street greeted by sending the company's shares down.
Chief Executive Jim Cantalupo, only two weeks into his new post, also told investors that the world's largest restaurant company would not be providing much-watched quarterly earnings guidance for 2003, adding McDonald's to a list that includes consumer stalwarts Coca-Cola Co. and Gillette Co.
McDonald's shares, which closed off 84 cents to $15.85 on the New York Stock Exchange, began their decline shortly after Cantalupo began speaking, falling more than 6% to an intra-day low of $15.65.
The company expects to report its first loss when it releases fourth-quarter results next week.
In a conference call with investors, Cantalupo offered little for them to chew on. They had hoped for changes to a discounting menu that has been blamed for eroding the company's U.S. profit and escalating a price war with No. 2 hamburger maker Burger King Corp.
Cantalupo forecast more store closings in the United States and Japan, both major markets, but he declined to provide numbers. He promised modifications to McDonald's kitchen to improve service, but offered few details.
Oak Brook, Ill.-based McDonald's adopted its Dollar Menu last year to help drive up traffic in the United States, its largest market with some 13,000 units. Analysts have held the menu responsible for weakening U.S. sales in the fourth quarter.
Former McDonald's CEO Jack Greenberg retired under pressure in December.
"Given today's show-me-the money environment, I accept your skepticism," Cantalupo said. "I support our Dollar Menu. Everyday value has always been important to McDonald's and the industry."