McDonald’s U.S. same-store sales declined 1.4% in the fourth quarter, the company said on Monday, as value offers generated traffic but not strong enough sales to offset an E. coli outbreak out west.
The company said that traffic to its domestic restaurants increased slightly, meaning customers came in more often but spent less in the process.
The results confirm some recent suggestions from analysts that sales have been slower to recover from the outbreak, which sickened more than 100 customers in several states who ate Quarter Pounders made with fresh onions from a Taylor Farms facility in Colorado that’s been implicated in the incident.
That outbreak wiped out some strong early October results from the company’s promotion of the Chicken Big Mac and has kept pressure on the top line since then.
The results complete a tough year for the Chicago-based company’s domestic market, where McDonald’s has been the poster child for consumer frustration over rising fast-food menu prices. The company shifted marketing in June to focus more on value offers, and pushed a $5 Meal Deal that has since been included in a broader, McValue Menu that also integrates local and digital deals.
"Our performance in 2024 did not meet our expectations," CEO Chris Kempczinski said Monday morning. But he also noted McDonald's unexpected appearance in a handful of news events during the year, such as the election, citing them as a sign of the chain's brand strength. "At times it felt like McDonald's was part of almost every major news story."
Traffic growth suggests the offers are leading more consumers to order such deals, rather than the company’s full-priced offerings, which could pressure franchisee margins.
Executives said that sales in the quarter were at their worst in early November but improved as the quarter went on and suggested that improvement continued into the current period. They suggested that the sales impact from the E. coli incident should be over by early next quarter.
For the full year, McDonald’s U.S. same-store sales increased 0.2%. Globally, the key metric decreased 0.1%, as challenges in markets such as the Middle East and parts of Europe pressured revenues.
There is at least some hope on that front: Same-store sales in the fourth quarter increased 4.1% in the company’s International Developmental Licensed Markets division, driven in part by improving results in the Middle East—which had struggled due to the conflict in Israel.
Revenues in the quarter were flat $6.4 billion. Net income was $2 billion, or $2.80 per share, down 4%. Both numbers fell below analyst expectations, according to the website Earnings Whispers.
The company’s loyalty program was a bright spot. McDonald’s now has 175 million loyalty members across 60 markets, up 15% compared with last year. Those loyalty members spent $8 billion last quarter, up 30% compared with a year ago.
UPDATE: This story has been updated to include information from McDonald's fourth-quarter earnings call.
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