McDonald’s plan lacks direction, former exec says


McDonald's hotly anticipated turnaround plan went over like a limp fry on Monday. (Tweet this.)

"Based on this presentation, I'd defy anyone to figure out what they want the brand to be when it grows up," said Larry Light, former McDonald's chief marketing officer and current CEO of marketing consultancy firm Arcature, in a phone interview.

McDonald's turnaround strategy

"When it came to a discussion on the brand, there were glittering generalities but no specifics," Light added.

In a phone conversation with CNBC, McDonald's Spokeswoman Heidi Barker stressed Monday's announcement was only the initial steps of the turnaround.

McDonald's shares fell 0.6 percent in early trading, following the release of a turnaround plan that analysts had said was crucial to the company's hopes of a rebound. (Click here to track its stock.)

The company said it would accelerate refranchising, overhaul its organization structure and deliver about $300 million in net annual general and administrative expense savings, most of which it says it will realize by the end of 2017.

Read More McDonald's CEO: 'We will be accelerating' refranchising

Restructuring will not turn a brand around if there is not clear brand direction, said Light, who thought the presentation lacked brand direction and specifics about the fast food giant's customers.

Light was part of the team that helped McDonald's right the ship during a previous difficult period in the brand's history in the early 2000s.

"The key to the turnaround is we aligned the system around a coherent plan," he said.

Still, he was encouraged by the sense of urgency CEO Steve Easterbrook said was necessary to improve the company's performance.

"The refranchising—it's about time. The improved financial discipline and reduced G&A—it's about time. Restructuring—you can't be against that – but it felt like about 80 percent of the presentation and about half of the press release is about reorganizing," he said.

McDonald's reorganizing into 4 segments

Will Slaubaugh, a managing director at Stephens, called McDonald's stock drop a "knee-jerk reaction."

"What was probably missing was a return to more capital to shareholders…I think that might be why the stock is trading down initially," he said.

McDonald's plans to reach the top end of its three-year $18 billion to $20 billion cash return target by the end of next year.

Still, Slaubaugh said the plan included "multiple moves in the right direction."

"Much of these developments appear previously anticipated" and "the Street likely wanted more details on the operational front," said Janney Capital Markets Analyst Mark Kalinowski in a note to clients about the slight share price drop in McDonald's stock.