CNBC's Jim Cramer shares his thoughts on McDonald's big earnings miss. Cramer says the quarter was so horrible a shakeup is coming and believes it's an activist play. 
 
 As fast food giant McDonald's struggles to retain customers domestically and abroad, it reported its worst monthly comparable sales decreases in the U.S. and Europe since early 2003, according to a new note from Janney Montgomery Scott. 
 
 "Holy moley!" Janney analyst Mark Kalinowski said in a phone interview. "This one is certainly not going to be talked about for decades to come in a positive way." 
 
 During September, comps dived 4.1 percent in the U.S., 4.2 percent in Europe and 7.5 percent in the fast food company's Asia Pacific Middle East Africa unit. 
 
 In the third quarter, global comparable sales dived 3.3 percent.The fast food giant was expected to see its global same store sales shrink by 3 percent with U.S. sales falling by 2.9 percent and those in the Asian Pacific Middle East Africa unit dropping by 10.6 percent, according to a forecast from Consensus Metrix. 
 
 
 
 To spark a turnaround it its U.S. unit, McDonald's has been ramping up its transparency efforts and highlighting its food quality. Abroad, McDonald's sales have seen an impact after a scandal involving one of its suppliers in China, which it has since suspended. 
 
 
 
 Watch: Yum, McDonalds face food safety scandal in China 
 
 McDonald's on Tuesday reported net income that dropped 30 percent and revenue that missed analysts' expectations as the Dow component battled declining traffic in all major segments. 
 
 After the earnings announcement, the company's shares were lower in late morning trading. (Click here to get the latest quotes for the fast food giant.) 
 
 Net income during the third quarter fell 30 percent to $1.07 billion or $1.09 per share from $1.52 billion or $1.52 a share in the year-earlier period. 
 
 Revenue fell to $6.99 billion from $7.32 billion a year ago. 
 
 "I think they're still losing share," said Telsey Advisory Group senior analyst Peter Saleh, adding that millennial diners are part of the problem for McDonald's. 
 
 "They're moving toward higher quality, naturally raised food, and McDonald's just isn't resonating with that younger crowd," Saleh added. 
 
 Analysts had expected McDonald's to deliver earnings of $1.37 per share on $7.18 billion in revenue, according to Thomson Reuters. 
 
 "McDonald's third quarter results reflect a significant decline versus a year ago, with our business and financial performance pressured by a variety of factors—from a higher effective tax rate, to unusual events in the operating environments in APMEA and Europe, to under-performance in the U.S., our largest geographic segment," McDonald's President and Chief Executive Officer Don Thompson said in a statement. 
 
 Read MoreMcD's wood pulp and pink slime? No way, chain says ||||| Fast food behemoth McDonald's is struggling to remain relevant. 
 
 It reported a larger-than-expected drop in profits Tuesday morning. Net income for the third quarter fell 30% to $1.07 billion ($1.09 per share) from $1.52 billion ($1.52 per share) a year ago. 
 
 "McDonald's third quarter results reflect a significant decline versus a year ago, with our business and financial performance pressured by a variety of factors - from a higher effective tax rate, to unusual events in the operating environments in APMEA and Europe, to under-performance in the U.S., our largest geographic segment," said McDonald's President and Chief Executive Officer Don Thompson. 
 
 The restaurant chain has struggled to maintain its relevancy with millennials, a key consumer group, in the face of competition from fast-casual chains like Chipotle, which continues to report explosive growth. It's also still reeling from a supplier scandal in China involving expired meat. 
 
 Recent initiatives to bolster sales include an aggressive push into breakfast, plus beefed up customer service during busy hours. 
 
 Overall, revenue was down 5% to $6.9 billion, and global comparable sales decreased by 3.3%. 
 
 The stock was down 2% to $89.60 in pre-market trading, and is up just 0.2% year-to-date but pays a 3.7% dividend yield. ||||| ENLARGE McDonald’s reported its global same-store sales fell 3.3% in the latest quarter. John Taggart for The Wall Street 
 
 McDonald’s Corp. outlined plans for what it called fundamental changes to its business as it reported one of its worst quarterly profit declines in years, driven by problems in nearly every major part of its business. 
 
 The 30% decline in net income for the period ended Sept. 30 was the latest in a string of disappointing results for the world’s largest restaurant chain. It is struggling with weak sales in Asia, Europe and, most important, its home market in the U.S. 
 
 In the U.S., an increasingly complicated menu has slowed service and McDonald’s once reliable base of younger customers have defected to fast-casual chains boasting customized ordering and fresh ingredients, including Chipotle Mexican Grill Inc., and specialty-burger places such as Five Guys. 
 
 McDonald’s has focused so far on efforts including increased staffing at busy times, and has shaken up its management ranks, including replacing the head of its U.S. business for the second time in less than two years. But the changes have yet to boost sales or profit. 
 
 ENLARGE 
 
 The 4.1% decline in McDonald’s September U.S. same-store sales marked the worst monthly U.S. same-store sales performance since February 2003. 
 
 In response, McDonald’s Chief Executive Don Thompson on Tuesday said it would simplify its menu starting in January, in part to remove low-selling products, and plans to give the company’s 21 domestic regions more autonomy in rolling out products that are locally relevant. 
 
 By the third quarter of next year, McDonald’s also plans to fully roll out new technology in some markets to make it easier for customers to order and pay digitally and to give people the ability to customize their orders, part of what the company terms the “McDonald’s Experience of the Future” initiative. 
 
 “The key to our success will be our ability to deliver a more relevant McDonald’s experience for all of our customers,” Mr. Thompson said. “Customers want to personalize their meals with locally relevant ingredients. They also want to enjoy eating in a contemporary, inviting atmosphere. And they want choices in how they order, choices in what they order and how they’re served.” 
 
 McDonald’s thrived through the global economic downturn. In the decade from 2001 to 2011, sales nearly doubled and profit more than tripled. But Mr. Thompson, who helped drive that growth as head of McDonald’s U.S. business, has confronted a series of challenges since taking the top job in July 2012. 
 
 In China, a scandal at one of its meat suppliers has shaken customer confidence, driving same-store sales down 9.9% in the latest quarter in McDonald’s Asia/Pacific, Middle East and Africa region. In Europe, broader economic softness was compounded by political complications in Russia, where authorities have been inspecting and, in some cases, shutting McDonald’s restaurants—moves widely seen as retaliation for U.S. sanctions in response to Russia’s military incursion in Ukraine. 
 
 The problems in China and Europe are considered to be short term. McDonald’s said it would be another six to nine months before the China business fully recovers. But the U.S. market, which accounts for roughly 40% of its more than 35,000 global restaurants, is facing a fundamental shift in the way Americans buy food. Young consumers, in particular, have been flocking to fast casual restaurants such Chipotle and Panera Bread Co. 
 
 Mr. Thompson said he knows consumers want more transparency about the source of ingredients. McDonald’s recently launched a social-media campaign in which it offers to answer questions about its food, and he said McDonald’s is considering offering organic food in some markets. 
 
 McDonald's shares are down with a decline in global sales and Coca-Cola unveils a broader cost-cutting plan. MarketWatch's Sital Patel has the details. Photo: Getty 
 
 “We recognize that we must demonstrate to our customers and the entire McDonald’s system that we understand the problems we face and are taking decisive action to fundamentally change the way we approach our business,” he said. 
 
 Analysts who participated in McDonald’s earnings call on Tuesday remained skeptical about whether the company can address bigger shifts in consumer behavior and win back younger customers without a major overhaul of the menu to include healthier fare. 
 
 Tony Scherrer, director of research at Smead Capital Management, which owns more than 150,000 McDonald’s shares, applauded the efforts. “To add some components that would give you a sense of local feel and health and for them to brand it as such would speak to the demographic they’ve missed out on,” he said. “For people to expect McDonald’s to change their lineup in order to become a Chipotle is unreasonable.” 
 
 Edward Jones analyst Jack Russo said that while people want variety, customizing menu items at a chain that derives about 70% of its sales from the drive-through could slow service even more. And becoming more healthful isn’t a panacea, he said, especially for a chain that has already tried adding salads, fruit smoothies and oatmeal to its menu with little traction. 
 
 “There’s a huge portion of the population that could care less about health and wellness,” Mr. Russo said. “They need to get lower middle-income consumers back to their stores.” 
 
 For the third quarter, profit fell to $1.07 billion, or $1.09 a share, from $1.52 billion, or $1.52 a share, a year earlier. The latest result included tax-related charges of 26 cents a share, flowing largely from what McDonald’s said was an unfavorable tax-court ruling in a foreign tax jurisdiction that it didn’t name. 
 
 Revenue fell 5% to $6.99 billion. Analysts polled by Thomson Reuters had expected earnings of $1.37 a share and revenue of $7.18 billion. 
 
 The drop in quarterly profit was the steepest since 2007, according to Sara Senatore, an analyst at Sanford C. Bernstein. Excluding one-time items like the tax charge, it was McDonald’s worst quarterly earnings decline since 2002, she said. 
 
 Shares closed 0.6% lower at $91.01 on Tuesday, leaving them down more than 6% for the year. 
 
 —Chelsey Dulaney contributed to this article. 
 
 Write to Julie Jargon at julie.jargon@wsj.com ||||| Starting in 1996, Alexa Internet has been donating their crawl data to the Internet Archive. Flowing in every day, these data are added to the Wayback Machine after an embargo period. ||||| NEW YORK (AP) — McDonald's CEO Don Thompson said Tuesday the company hasn't been keeping up with the times and that changes are in store for its U.S. restaurants. 
 
 FILE - In this July 22, 2014 file photo, a man rests outside a McDonald's restaurant in Beijing. McDonald's reports quarterly financial results on Tuesday, Oct. 21, 2014. (AP Photo/Ng Han Guan, File) (Associated Press) 
 
 Starting in January, Thompson said McDonald's will "simplify" its menu to make room for restaurants to offer options that are best-suited for their regions. To offer greater customization, he also said the company planned to expand its "Create Your Taste" offering that lets people pick the buns and toppings they want on burgers by tapping a touchscreen. The program is currently being offered in Southern California. 
 
 "We haven't been changing at the same rate as our customers' eating-out expectations," Thompson conceded during a conference call outlining the changes. 
 
 The remarks came after McDonald's said its profit sank 30 percent in the third quarter, with sales at established locations down 3.3 percent globally and in its flagship U.S. market. In the division encompassing Asia, where a major McDonald's supplier was shown on TV repackaging expired beef, the figure sank 9.9 percent. 
 
 Some analysts questioned whether the moves McDonald's has in store will be enough to fix its problems. Sara Senatore, a Bernstein restaurant analyst, noted that the company efforts seem focused on marketing around its food, rather than changing recipes. 
 
 In the U.S., perceptions around the freshness and quality of its ingredients have been a problem for McDonald's. The chain has been fighting to boost sales as people gravitate toward foods they feel are more wholesome. A day earlier, for instance, Chipotle said its third-quarter sales at established locations surged 19.8 percent. Steve Ells, Chipotle's co-CEO, said the results show people are realizing "there are better alternatives to traditional fast food" and that he expects the trend to continue. 
 
 McDonald's, meanwhile, launched a social media campaign last week inviting customers to ask questions about its food. It began with frank questions like, "Why doesn't your food rot?" and "Is the McRib made from real pork?", showing just how bad some of the perceptions about McDonald's food can be. 
 
 Over in China, an undercover TV report this summer showed one of its major suppliers repackaging expired meat. The plant stopped operations and many of McDonald's restaurants in the country were left unable to sell burgers, chicken nuggets and other items. The chain's reputation took a hit as well. 
 
 McDonald's, which has more than 35,000 locations around the world, said it expects its challenges will continue into the current quarter, with global sales down for October as well. 
 
 For the quarter, revenue declined to $6.99 billion, short of the $7.23 billion Wall Street expected. Net income declined to $1.07 billion, or $1.09 per share. Adjusted for one-time costs, earnings were $1.52 per share. Analysts expected $1.37 per share. 
 
 Shares of McDonald's Corp. were down 59 cents at $91 in midday trading. 
 
 ___ 
 
 Follow Candice Choi at www.twitter.com/candicechoi
– Investors were bracing for lousy numbers from McDonald's today, and the chain failed to meet even those expectations. McDonald's reported a 30% drop in quarterly profit, thanks to what the Wall Street Journal calls "problems in nearly every major part of its business." As one analyst puts it to CNBC: "Holy moley!" Sales were down in the US, in Europe, and in China, with dismal numbers in the latter country hurt further by a meat scandal. But this isn't about one-time trouble. "McDonald's has a problem," writes Ben Levisohn at Barrons. "Investors have known this for a while, and now it seems McDonald’s management does too." In the US, at least, a big part of that problem is that the chain "has struggled to maintain its relevancy with millennials," writes Lauren Gensler at Forbes. In fact, McDonald's "is struggling to remain relevant," period, she writes. CEO Don Thompson unveiled reforms today to try to turn things around, starting with a push to "simplify" the menu and let people customize their food to a greater extent, reports AP. But "it might take bigger steps, however, before investors can start believing in McDonald’s again," writes Levisohn. (Click to read about McDonald's latest trouble in Russia.)