McDonald's Q4 Earnings Fall Short, E. coli Outbreak Impacts US Sales

Revenue and Earnings Miss Estimates

McDonald's (MCD) reported fourth-quarter revenue of $6.39 billion, a 0.28% decline from the previous year, falling short of analyst expectations of $6.45 billion. Adjusted earnings per share (EPS) came in at $2.80, also below Wall Street's estimate of $2.84.

Mixed Same-Store Sales

Global same-store sales rose 0.4% in the quarter ended December 31, beating expectations of a 0.91% decline. However, U.S. same-store sales fell 1.4% year-over-year, impacted by an E. coli outbreak that reduced momentum in late October.

CEO Acknowledges Challenges

CEO Chris Kempczinski acknowledged the company's challenges, stating that McDonald's is moving with "urgency" to increase guest count, gain market share, and "reclaim leadership in value and affordability."

International Stores Support Growth

International-owned stores contributed to positive same-store sales growth in the Middle East, Japan, and China. CFO Ian Borden attributed this to the decline in Israeli conflict impact and encouraging signs of stabilization in China.

Earnings Summary

Compared to Wall Street estimates (Bloomberg consensus data):

* Revenue: $6.39 billion vs. $6.45 billion
* Adjusted EPS: $2.80 vs. $2.84
* Global Same-Store Sales Growth: +0.4% vs. -0.91%
* US Same-Store Sales Growth: -1.4% vs. -0.35%
* International-Owned Same-Store Sales Growth: -0.1% vs. -1.22%
* International Franchised Same-Store Sales Growth: +4.1% vs. -0.38%

Full-Year 2024 Results

Compared to Wall Street estimates (Bloomberg consensus data):

* Revenue: $25.92 billion vs. $25.99 billion
* Adjusted EPS: $11.39 vs. $11.74
* Global Same-Store Sales Growth: -0.1% vs. -0.39%
* US Same-Store Sales Growth: +0.2% vs. +0.44%
* International-Owned Same-Store Sales Growth: -0.2% vs. -0.50%
* International Franchised Same-Store Sales Growth: -0.3% vs. -1.39%

McValue Platform and Innovation

The McValue platform will launch in U.S. restaurants in 2025, aiming to attract low-income consumers and drive innovation. McDonald's plans to expand its chicken portfolio and explore breakfast innovations.

Analysts' Outlook

Analysts believe McDonald's efforts will improve performance in the second half of 2025. However, some franchisees express concerns about overdependence on promotions.