McDonald’s (NYSE:MCD) CEO Jim Skinner — the man who more than quadrupled the fast-food giant’s value since taking over in 2004 — is calling it a career.
The 67-year-old executive announced Wednesday that he would be stepping down from the helm, turning the keys over to 48-year-old COO Don Thompson starting July 1.
Skinner is largely credited with McDonald’s renaissance after a tumultuous six-month period in which the company lost two CEOs. In addition to leading the company since late 2004, he also helped design McDonald’s “Plan to Win” strategy, which included menu expansion and business streamlining that boosted the company’s profitability.
McDonald’s has become a global juggernaut, with 33,000 restaurants spanning 119 countries. During Skinner’s tenure, MCD shares soared almost 300% in value to their current price around $97 — beating out the broader markets’ roughly 20%. That run includes last year’s 31% jump that made McDonald’s the best Dow Jones stock of 2011.
See Also: Skinner’s Toughest Challenge: His Succession
The franchise has become the undisputed king of burger-flipping. While Wendy’s (NASDAQ:WEN) recently celebrated its ascent past Burger King to the No. 2 hamburger chain — its first time ranking that high in 42 years of business — it did so on about $8.5 billion in sales in 2011. Which is about a quarter of McDonald’s $34.2 billion in sales.
McDonald’s has consistently grown those revenues — and earnings — for years. In January, MCD reported its 10th consecutive quarter of double-digit earnings growth, with profits of $1.38 billion ($1.33 per share) trumping the year-ago period’s $1.24 billion ($1.16) by 10%. And its full-year earnings per share of $5.27 were up 15% from 2010.
Expectations for the company have grown to almost laughable proportions. Earlier this month, McDonald’s stock was dogged on lower-than-expected global same-store sales growth in February — of 7.5%. In contrast, consider Wendy’s fourth-quarter same-store sales growth of more than 4.4% represented the company’s best performance since 2004.
See Also: McDonald’s Could Be the Apple of Fast Food
Skinner has achieved all this through a number of avenues. The company is laser-focused on margins, its locations resembling precise portion machines moreso than restaurants. McDonald’s continues to innovate, through drinks like its popular McCafe line or summertime flavored lemonades, and through revamped store designs. Meanwhile, it continues to grow the breadth — and popularity — of novelty items like the Shamrock Shake and McRib.
Thompson — a former Northrop Grumman (NYSE:NOC) employee — has some tough shoes to fill. Not only will he be taking over a fast-food behemoth, but he’ll be in the spotlight as one of the highest-profile African-American businessmen in the country. However, he quickly has risen through the ranks, and his roles in both innovation and new-market strategies befit McDonald’s future challenges.
For the next few months, however, Skinner will remain in the helm, and investors will be left to weigh the effect his departure will have on the company.
MCD shares were down less than 1% in pre-market trading Thursday.
Kyle Woodley is the assistant editor of InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley.
