McDonald's (MCD): Q4 Results Miss Expectations, Company Focuses on Value Menu and Growth

Revenue and Earnings Fall Short

McDonald's (MCD) reported disappointing fourth-quarter results, falling short of analyst expectations. Revenue declined 0.28% year-over-year to $6.39 billion, missing the estimated $6.45 billion. Adjusted earnings per share also underperformed, reaching $2.80 compared to the anticipated $2.84.

Global and US Same-Store Sales Performance

Global same-store sales grew 0.4% for the quarter, beating the expected 0.91% decline. However, US same-store sales decreased 1.4% due to an E. coli outbreak that impacted momentum in late October.

International Strong Performance

International-owned stores saw positive same-store sales growth, particularly in the Middle East, where the impact of the Israeli conflict had subsided. Japan and China also experienced growth, with the latter showing "encouraging signs of stabilization."

Company Outlook and Initiatives

McDonald's CEO Chris Kempczinski emphasized the company's focus on increasing guest count, gaining market share, and regaining "leadership in value and affordability." The McValue menu platform and new offerings, including chicken strips and snack wraps, are expected to attract customers and drive foot traffic in 2025.

Financial Overview

Fourth Quarter Results (vs. Wall Street 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 Results (vs. Wall Street 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%

Analysts' Perspectives

Analysts are hopeful that the fourth quarter results represent the "low point in recent history for the brand." Experts predict that McDonald's will regain foot traffic and show positive recovery in the second half of 2025. However, concerns remain about the overreliance on promotions and their impact on franchisee profitability.