McDonald's Q4 2024 Results: Missed Mark amid Stock Underperformance and E. coli Outbreak

Financial Performance Overview

McDonald's (MCD) reported mixed financial results for the fourth quarter of 2024, falling short of analysts' expectations.

* Revenue declined 0.28% year-over-year to $6.39 billion, missing estimates of $6.45 billion.
* Adjusted earnings per share (EPS) reached $2.80, below Wall Street's forecast of $2.84.

Same-Store Sales Growth

* Global comparable-store sales increased 0.4% for the quarter ended December 31, exceeding expectations of a 0.91% decline.
* However, US same-store sales dropped 1.4% year-over-year due to an E. coli outbreak in late October.

Earnings Breakdown

* Q4 2024 vs. Estimates:
* 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 Fiscal 2024 vs. Estimates:
* 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%

Company Outlook and Strategic Initiatives

* CEO Chris Kempczinski emphasized "urgency" in increasing customer count, gaining market share, and reclaiming leadership in value and affordability.
* The McValue menu platform and new menu offerings, including chicken strips and snack wraps, aim to drive foot traffic in 2025.
* International markets, particularly the Middle East, Japan, and China, are expected to contribute to growth.
* The focus on value and affordability is intended to attract low-income consumers and enhance margins despite the potential impact on promotions.
* Innovation in breakfast and chicken offerings is also planned.

Analyst Sentiment

Analysts believe the fourth-quarter results may represent a low point for McDonald's brand. They expect improvements in the second half of 2025, but concerns remain about franchisee dependence on promotions.