McDonald's Corporation defied expectations with a fourth-quarter sales increase, driven by its international business which offset a decline in the US market. The company faced challenges including an E. coli outbreak and ongoing geopolitical tensions, but also implemented strategies to attract value-conscious consumers.
McDonald's Corp. sales rebounded in the fourth quarter, driven by growth in its international business which mitigated a decline in the US market. Global same-store sales increased by 0.4%, exceeding analyst predictions of a decline, marking an end to two consecutive quarters of negative performance. This downturn was attributed to consumers reducing restaurant visits and boycotts following the Israel-Hamas war. While US sales experienced a steeper-than-expected 1.
4% decline, guest counts saw a slight increase, but the average order value decreased from the previous year. This was partly due to higher prices contributing to larger checks in the past year. \The quarter was marked by challenges, including an E. coli outbreak in the US that resulted in one fatality and over 100 illnesses, leading to customer apprehension. McDonald's pledged $100 million to regain customer trust. Simultaneously, the company launched a $5 meal deal in June to counter the perception that its food was overpriced. \Offsetting the US performance, McDonald's international divisions demonstrated resilience. The division encompassing Japan and the Middle East reported a 4.1% increase in same-store sales. However, the company cautioned that the war's impact on its business remained, with potential for continued negative effects until the conflict's resolution. The other international segment, including markets like France and the UK, showed minimal growth. Analysts had anticipated declines across all of McDonald's divisions. Shares of the company rose 2.8% in premarket trading in New York on Monday. McDonald's stock has remained relatively stable over the past year, while the S&P 500 Index has experienced a 20.6% gain. Last year, the company initiated a global campaign to attract inflation-conscious customers, including a promotion for coffee starting at C$1 in Canada and a €4 Happy Meal in France. In addition to the US value meal, the company sought to generate excitement with offerings such as Halloween buckets and a limited-edition dulce de leche frappé. McDonald's projects operating margin in the mid-to-high 40% range and plans to invest $3 to $3.2 billion, primarily in new US and international restaurants. The chain concluded 2024 with 43,477 restaurants globally, representing a roughly 4% increase from the previous year. McDonald's reported profit of $2.83 per share in the fourth quarter, excluding certain items, a slight decrease from the prior year. Consolidated revenue remained stable
MCDONALDS SALES INTERNATIONAL GROWTH US DECLINE COVID-19 VALUE MEALS RESTAURANT INDUSTRY
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