Financially, McDonald's is soaring with annual revenues of more than $21 billion dollars. That's a major turnaround from where the company was just a few years ago.
In 2002, after years of unchecked growth and a lack of attention to basics, McDonald's announced its first ever quarterly loss.
"We like to say, we took our eyes off our fries," explains McDonald’s Chief Executive Jim Skinner.
“In 2002 same store sales were sliding?” asks Quintanilla.
“Right,” replies Skinner.
“Margins were sliding?” Quintanilla adds.
“Right,” Skinner’s responds.
“First quarterly loss ever,” Quintanilla says.
“Right,” says Skinner.
“What went wrong in that, in that period?” asks Quintanilla.
“Well, first of all, I call 2002, the year of the perfect storm where all the things and the strategies that we were pursuing, the growth strategy, we basically hit the wall in 2002," answers Skinner.
A growth strategy that included opening more than 2,000 new restaurants a year. It was unsustainable even for the golden arches.
"We invested $4 billion dollars in new store growth over the previous 3 or 4 years, no incremental income growth. You know, that's a formula for, you know, failure,” says Skinner.
"Bankruptcy?" asks Quintanilla.
“Right, right, right.” replies Skinner
Jeff Macke says consistency is the big issue for McDonald's because some restaurants are company owned while others are franchises. Jeff feels MCD is a buy until he sees inconsistency in their stores.
Eric Bolling says the charts suggest to him if McDonald’s stock dips lower than $50 get out – and if it goes above $53 own the stock.
Pete Najarian jokes that if McDonald’s does well, investors should buy Bristol-Myers (BMY) for their diabetes drug pipeline.
Got something to say? Send us an e-mail at email@example.com and your comment might be posted on the Rapid Recap! Prefer to keep it between us? You can still send questions and comments to firstname.lastname@example.org.
Trader disclosure: On July 25th 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (ATVI), (JWN) Bolling Owns (BP), (XOM).