The dominant company in fast food. Excellent worldwide brand recognition. Strong free cash flow. Excellent access to capital. Decline in worldwide comparable-store sales. Intensely competitive industry. Shrinking margins at company-operated and at franchised stores. Negative impact from aggressive share repurchase programs. The ratings on McDonald's Corp. reflect disappointing results in 2002, and Standard&Poor's Ratings Services' opinion that management faces significant challenges in successfully implementing a number of important strategic changes designed to revitalize McDonald's worldwide business. The company still possesses substantial strengths based on its worldwide leadership in the quick-service sector of the restaurant industry, and its overall business profile is considered to be above average. However, McDonald's financial performance has been hurt, as it has felt the
