What makes a company truly poorly run? Businesses make mistakes almost daily, and industries can transform rapidly, eroding even a market leader’s competitive advantage.

Companies that are struggling may have declining fundamentals, such as revenues and earnings. Ultimately, however, it is the market that determines how well, or poorly, a company is run. All of the eight businesses identified by 24/7 Wall St. as America’s worst run companies declined in three key measures — earnings per share, revenue, and share price — in the last year.

In order to be considered truly poorly run, a company must have a track record of missed opportunities, mismanaged risks, poor operational decisions, or executive malfeasance. In short, a company must demonstrate a pattern of decision making that calls into question the ability of its management and directors to adequately provide returns to shareholders.

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While the U.S. stock market has enjoyed a rally in the past five years, the worst run companies reviewed by 24/7 Wall St. failed to match the S&P 500 rise of 82% during that time. Some of these companies have actually lost market value over that stretch. Avon Products (NYSE: AVP) is the most notable example. Avon’s share price tumbled nearly 74% over the last five years, as its China business transformed from a huge growth opportunity into a boondoggle.

Some of the poorly managed companies have missed opportunities on which others capitalized. Among the best examples is McDonald’s (NYSE: MCD), which did not follow fast-casual rivals in creating a menu that was simplified and customizable. GameStop (NYSE: GME), too, missed a major opportunity to make a name for itself in digital distribution for video games, a market that game maker Valve entered over a decade ago when it launched Steam.

In other instances, companies have made poor operational decisions. An example is the slow pace at which Staples (NASDAQ: SPLS) has closed locations. Staples built an online business without adequately downsizing its brick-and-mortar locations, even though sales did not justify the large number of stores.

In some cases, management decisions may not have had shareholders’ best interests at heart. Freeport-McMoRan’s (NYSE: FCX) acquisition of two oil producers in 2012 immediately raised questions of self-dealing and led to a shareholder lawsuit. The lawsuit alleged that, with six board members holding seats on one of the companies involved, Freeport directors were effectively using company funds to bail out their own investment.

Many of these companies are not without hope. McDonald’s could outperform if it is able to again draw in customers with an improved menu. Mattel (NYSE: MAT), too, might surge if kids rediscover the appeal of Barbie. And IBM (NYSE: IBM) may rise if the company becomes more competitive in cloud computing.

In order to determine America’s worst run companies, 24/7 Wall St. reviewed all S&P 500 stocks that declined in the past year. We then screened for companies where the trailing 12-month revenue and diluted earnings per share had declined from the year before. 24/7 Wall St. editors then reviewed this list for companies that had missed major opportunities to expand, made operational choices that undermined their financial performance over a multiyear period, or whose managers and directors failed to adequately serve shareholder interests. Figures on revenue and diluted EPS, as well as industry classifications, are from S&P CapIQ. One-year share price data, also from CapIQ, is as of December 8, 2014.

These are America’s Worst Run Companies

1. International Business Machines
> Industry: IT consulting and other services
> Revenue (last 12 months): $97.4 billion
> 1-year share price change: -8.9%

IBM, which continues to be a market leader in IT consulting and hardware, has struggled to respond to the shift to cloud computing, as businesses moved from maintaining servers and mainframes to using cloud storage and software. While IBM continues to rely heavily on its legacy businesses, competitors, including Amazon and Rackspace, are well ahead in providing cloud infrastructure services.

In the first three quarters of the year, revenues of the company’s hardware unit declined by 16%, and the unit’s profitability has continued to erode — its pretax loss grew to $354 million. And although IBM’s cloud computing sales are expanding rapidly, the company’s annualized $3.1 billion in cloud services revenue are a fraction of its nearly $100 billion in total revenues.

The struggling hardware business hurts IBM’s other segments, because the company’s units are often dependent on each other — hardware is often sold with software and services attached to it, for instance. IBM’s global services external revenue declined by 2.7% in the third quarter from the same time a year ago.

One of the company’s biggest problems in recent years was also largely self-induced — IBM wanted to simultaneously grow the lower margin cloud business and raise adjusted earnings to $20 per share by 2015. Following the company’s recent poor quarter, however, IBM said it would ditch that goal.

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2. McDonald’s
> Industry: Restaurants
> Revenue (last 12 months): $28.0 billion
> 1-year share price change: -4.3%

For decades, McDonald’s was the model for how to build a global fast food brand. Recently, however, the company has been struggling. In November, the company announced that global comparable sales fell 2.2% year-over-year. In the United States, top-line performance was even worse, with comparable sales down 4.6%.

One regularly cited problem for McDonald’s is young customers increasingly favoring fast-casual brands such as Chipotle and Panera Bread. These chains offer fresher food and straightforward, yet highly-customizable, menus. Notably, McDonald’s once owned Chipotle before spinning off the brand in 2006.

Recently, McDonald’s announced plans to pare down its menu in order to address frequent criticism that it is too complex. However, investors may want to ask why McDonald’s did not take action sooner, especially since in early 2014, executives at McDonald’s admitted that “we over-complicated the restaurants.”

3. Staples
> Industry: Specialty supplies
> Revenue (last 12 months): $22.7 billion
> 1-year share price change: -10.3%

Staples appears to be making the transition from a brick-and-mortar chain to an online retailer. The company has been closing stores across the country to reduce their drag on earnings, which fell 13% over the last three years on a trailing 12 month basis. Staples announced at the start of the year plans to cut just over a 10th of its stores, or 225 in all, by the end of fiscal 2015.

Although online sales have increasingly made up a larger portion of the company’s revenues, shareholders would like to see an even faster pace of store closures.

Another problem is that Staples also faces fierce competition from huge retailers such as Amazon.com and Walmart. Recently, activist fund Starboard Value disclosed a major stake in Staples and in rival Office Depot. The fund is expected to push for the two to merge — a move that could be in the company’s best interest. Office Depot itself merged with rival OfficeMax last year and continues to close stores at a rapid pace.

4. GameStop
> Industry: Computer and electronics retail
> Revenue (last 12 months): $9.5 billion
> 1-year share price change: -21.9%

GameStop’s efforts to break into the digital distribution space, which increasingly drives game sales, have not been successful. Much of this was likely due to the increased use of digital stores available on Microsoft and Sony’s consoles, which allow customers to buy games without buying a physical copy.

The development of digital stores may also hit GameStop’s highly profitable video game resale business, as customers increasingly use streaming services rather than buy physical discs. The emergence of Walmart’s used game program is also a threat.

Gamestop has also been unable to build a successful service like Valve’s Steam, a digital distribution platform for PC games. Valve has developed an enormously popular service, boasting 35 million active users as “the world’s largest online gaming platform,” according to the company.

GameStop’s sales in the most recent quarter were down from the year before, as new software sales declined by more than a third. This is despite the fact that hardware sales received a boost from the November 2013 launch of the Xbox One and PlayStation 4.

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5. Mattel
> Industry: Leisure products
> Revenue (last 12 months): $6.1 billion
> 1-year share price change: -33.4%

Mattel created the iconic Barbie over five decades ago. But while Barbie was once key to the company’s success, in 2014 the doll has become its albatross. Gross sales of Barbie were down 21% in the third quarter from the third quarter the year before. This was even worse than in the preceding two quarters, when Barbie sales fell 14% and 15% in the first and second quarters, respectively.

Despite the trend, Mattel has expressed its faith in the brand. CEO Brian Stockton told analysts in a recent earnings call that “Barbie is going to continue to be a brand that we spend a lot of time and attention on.” While the company is doubling-down on a flagging brand, it will soon lose the rights to a soaring one. Production of Disney Princess toys will shift to Hasbro in 2016, including for the hugely popular film, Frozen. Disney toys and Frozen helped offset some of Mattel’s pain from the Barbie slump. According to the National Retail Federation, Frozen merchandise is set to surpass Barbie as the number one gift for girls this holiday season.

Additionally, Mattel has to compete with a resurgent Lego, which serves as evidence that reviving an established brand is possible in the current toy market. The Danish toymaker’s revenues have soared in recent years. Lego reported 11% revenue growth in its most recent half year.

6. Avon
> Industry: Personal products
> Revenue (last 12 months): $9.2 billion
> 1-year share price change: -44.6%

Avon, which was founded in 1886, offered women the opportunity to earn money long before many workplaces considered hiring women.

Although the beauty products company has grown to a powerhouse, it has struggled in recent years. Avon replaced longtime CEO Andrea Jung with Johnson & Johnson’s Sherilyn McCoy in 2012. The board charged McCoy with reversing years of declining profits and reaching a conclusion to the government’s investigation into bribery allegations in China.

In December, nearly two and half years after McCoy was hired, the company agreed to resolve the bribery probe through settlements with both the Department of Justice and the Securities and Exchange Commission. While the company once viewed China as a potential billion dollar market, its recent experiences there have been disastrous. Chinese sales cratered last year, dropping by 42% year-over-year, yet the company continues to invest on advertising in the market to back product re-launches.

Perhaps worst of all, McCoy has been unable to restore the company to profitability. McCoy has been largely unable to stem a sales decline in the United States. North American revenues dropped 16% year-over-year in the third quarter, in large part due to a decrease in active independent Avon sales representatives. On a trailing 12-months basis, the company had a net loss of $123 million.

7. Owens Illinois
> Industry: Metal and glass containers
> Revenue (last 12 months): $6.9 billion
> 1-year share price change: -23.1%

Owens-Illinois (NYSE: OI) is a leader in glass packaging, including making bottles for beers, sodas, wines, and more. However, the company has been hit by hard times lately. O-I stands firmly in favor of glass packaging, but a lack of diversification is problematic since glass has lost market share to other types of packaging.

Other packing companies have succeeded even as O-I has floundered. As O-I’s earnings have fallen 24% in the last three years — on a trailing 12 month basis — metal packaging leader Ball Corporation’s earnings have increased by 32% in that time, helped by a focus on containing costs. Barclay’s noted in a recent downgrade that consumers no longer have strong preferences for glass bottles over cans — at least not enough to justify the additional price.

Company investors may want also to question why the company has not expanded into metal. Privately held Irish company Ardagh Packaging Holdings Limited demonstrates that that packaging companies can maintain operations in both metal and glass. Metal and glass each generated roughly half of the company’s 4 billion euro revenue last year.

O-I has done a consistently poor job of managing investor expectations. In October, Morningstar noted the company had a track record of setting overly optimistic forecasts that it fails to meet. The company lowered its guidance in October, leading to a selloff. In December, O-I again cut its 2015 outlook, prompting the Barclays downgrade. In a recent letter activist fund Atlantic Investment Management blamed management for inefficiently running the company, while calling CEO Albert Stroucken “quick to assign blame to macro factors when earnings miss the target.”

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8. Freeport-McMoRan
> Industry: Diversified metals and mining
> Revenue (last 12 months): $22.1 billion
> 1-year share price change: -26.6%

Freeport-McMoRan is a global mining company with copper, gold, molybdenum, and oil and gas operations. The company derives much of its operating profits from its North American copper business and from the Grasberg Minerals District in Indonesia, home to some of the world’s largest copper and gold reserves. Like other commodities players, Freeport has been hurt by the drops in copper, gold, and oil prices.

However, company investors have even more reasons to be upset. According to The Wall Street Journal, Freeport is closing in on a more-than $100 million lawsuit settlement related to the acquisitions of two companies in recent years. Shareholders alleged that Freeport’s acquisition of a company called McMoRan Exploration, in which many Freeport executives held a stake, amounted to a bailout. They also alleged that its buyout of Plains Exploration & Production, a minority owner of McMoRan Exploration, was intended to ensure the first deal went through.

Morningstar wrote in October that “the deals constituted a major use of shareholder capital in a manner we believe was inconsistent with shareholder expectations,” citing a 16% drop in stock price the day the deals were first announced.

In recent years, high pay packages for CEO Richard Adkerson have also been a source of criticism from investors. In the last five years, Freeport shares dropped by more than 44%, versus an 81% gain in the S&P 500.

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