McDonald's Q4 2024 Earnings Miss Estimates, Outlook Brightens for 2025

Key Metrics Fall Short

McDonald's (MCD) reported disappointing fiscal Q4 2024 results, failing to meet analyst expectations:

* Revenue: $6.39 billion (vs. $6.45 billion estimated)
* Adjusted EPS: $2.80 (vs. $2.84 estimated)

Same-Store Sales Mixed

Global same-store sales grew 0.4% for the quarter, exceeding expectations of a 0.91% decline. However, US same-store sales declined 1.4% year-over-year, impacted by an E. coli outbreak in late October.

McValue Menu to Boost Traffic

McDonald's is banking on its McValue menu platform and new offerings to regain foot traffic in 2025. CEO Chris Kempczinski emphasized the company's urgency in driving guest count and reclaiming market share.

Earnings Breakdown

* Q4 2024:
* Revenue: $6.39 billion (vs. $6.45 billion estimated)
* Adjusted EPS: $2.80 (vs. $2.84 estimated)
* Global same-store sales growth: +0.4% (vs. -0.91% estimated)
* US same-store sales growth: -1.4% (vs. -0.35% estimated)
* International-owned same-store sales growth: -0.1% (vs. -1.22% estimated)
* International franchised same-store sales growth: +4.1% (vs. -0.38% estimated)
* Full Fiscal 2024:
* Revenue: $25.92 billion (vs. $25.99 billion estimated)
* Adjusted EPS: $11.39 (vs. $11.74 estimated)
* Global same-store sales growth: -0.1% (vs. -0.39% estimated)
* US same-store sales growth: +0.2% (vs. +0.44% estimated)
* International-owned same-store sales growth: -0.2% (vs. -0.50% estimated)
* International franchised same-store sales growth: -0.3% (vs. -1.39% estimated)

Margin Concerns Offset by Value Focus

The company's McValue platform aims to attract value-oriented customers and offset margin challenges. Franchise operators believe the value offerings can drive incremental foot traffic.

2025 Outlook

Analysts expect McDonald's to return to positive growth in the second half of 2025, as comparisons against challenging pandemic periods ease. The company plans to focus on affordability and innovation, including expanding its chicken portfolio.

Analyst Commentary

* S&P Global: "While Q4 results missed estimates, we remain optimistic about McDonald's long-term prospects given its strong brand recognition and value-oriented offerings."
* Mizuho: "MCD's Q4 results were disappointing, but we believe the worst is behind it. The company's focus on affordability and menu innovation should support growth in 2025."
* Goldman Sachs: "We expect MCD's earnings to recover in the second half of 2025, as promotional activity normalizes and same-store sales improve. The company's value-driven strategy remains a key growth driver."