McDonald's (MCD) Misses Q4 Expectations Amidst Challenges
McDonald's (MCD) concluded 2024 with underwhelming results, missing analysts' expectations and facing headwinds.
Key Highlights:
- Revenue declined 0.28% to $6.39 billion, below the forecast of $6.45 billion.
- Adjusted earnings per share (EPS) fell to $2.80, below Wall Street's estimate of $2.84.
- Global same-store sales grew 0.4%, outperforming projections of a 0.91% decline.
- US same-store sales dropped 1.4% due to an E. coli outbreak affecting October momentum.
- CEO Chris Kempczinski expressed urgency in increasing guest count, enhancing market share, and regaining value leadership.
2024 Earnings Breakdown:
| Metric | Actual | Estimate |
|---|---|---|
| Revenue | $6.39 billion | $6.45 billion |
| Adjusted EPS | $2.80 | $2.84 |
| Global Same-Store Sales Growth | +0.4% | -0.91% |
| US Same-Store Sales Growth | -1.4% | -0.35% |
| International-Owned Same-Store Sales Growth | -0.1% | -1.22% |
| International Franchised Same-Store Sales Growth | +4.1% | -0.38% |
2024 Full-Year Results:
| Metric | Actual | Estimate |
|---|---|---|
| Revenue | $25.92 billion | $25.99 billion |
| Adjusted EPS | $11.39 | $11.74 |
| Global Same-Store Sales Growth | -0.1% | -0.39% |
| US Same-Store Sales Growth | +0.2% | +0.44% |
| International-Owned Same-Store Sales Growth | -0.2% | -0.50% |
| International Franchised Same-Store Sales Growth | -0.3% | -1.39% |
Outlook and Initiatives:
- McDonald's plans to revive foot traffic in 2025 through its McValue menu platform and menu innovations, targeting low-income consumers.
- The chain aims to expand its chicken portfolio and achieve an additional 1% market share by 2026.
- Analysts anticipate an improvement in McDonald's performance in the second half of 2025 due to easier comparisons.
- However, franchisees express concerns about the heavy reliance on promotions affecting profitability.