McDonald’s reported a decline in profits on Monday, citing the lasting impact of a food poisoning outbreak in the United States and the challenges posed by inflation on consumer spending across several markets.
The fast-food giant, which experienced an E. coli outbreak last fall linked to onions in its Quarter Pounder hamburgers, highlighted the continued sales slump in its home market. The company also attributed lower revenue to inflation-pressured customers in the United States, the United Kingdom, and other regions.
CEO Chris Kempczinski acknowledged that the company’s performance in 2024 fell short of expectations but commended the swift response of staff to the outbreak, which primarily affected the western United States.
In the fourth quarter, U.S. comparable sales declined by 1.4%. McDonald’s profits slipped by 1%, reaching $2 billion, while revenues remained mostly unchanged at $6.4 billion.
Kempczinski noted that sales in the Rocky Mountain region, where the outbreak originated, continued to lag. However, he confirmed that the issue had been contained to that area, with no significant impact on other parts of the U.S. He expects a full recovery by the start of the second quarter.
Although sales hit a low point shortly after the outbreak in late October, McDonald’s saw improvement later in the quarter through increased marketing efforts and value promotions, company executives stated during an earnings call.
The E. coli outbreak, which spanned 14 states, resulted in 104 reported cases, including 34 hospitalizations and one death, according to the U.S. Centers for Disease Control and Prevention (CDC).
Kempczinski described the broader U.S. market as “muted,” pointing to a significant drop in sales among lower-income consumers, with double-digit declines across the fast-food industry. However, he noted that spending from middle- and higher-income consumers remained strong.
“It’s crucial that we have a robust value program in place,” Kempczinski emphasized.
Looking ahead, McDonald’s remains on track with plans to expand its restaurant footprint both in the U.S. and internationally. The company is set to invest between $3 billion and $3.2 billion this year, with the goal of adding approximately 3,800 new restaurants. This includes roughly 1,000 new locations in China and several hundred in the U.S.
Despite the challenges, McDonald’s shares rose by 4.8% around midday.
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