TLDR:
- McDonald’s Q3 revenue reached $6.87 billion, up 3% year over year, beating expectations
- US same-store sales grew 0.3%, while international markets saw declines
- E. coli outbreak affected 75 people with 1 death; fresh beef distribution to resume
- Company ruled out quarter pounder patties as source, focusing investigation on onions
- CEO emphasizes focus on affordability amid cautious consumer spending
McDonald’s Corporation (MCD) reported its third-quarter 2024 results today, posting revenue of $6.87 billion, marking a 3% increase from the previous year. The results exceeded Wall Street expectations of $6.81 billion, according to Bloomberg consensus data.
The company’s adjusted earnings grew to $3.23 per share, surpassing analyst estimates of $3.20. This represents a 1% increase compared to the same period last year.
McDonald’s Corporation (MCD)
In the United States market, McDonald’s saw a modest growth in same-store sales of 0.3%. This growth was partly driven by the company’s $5 meal deal bundle, which has been extended through December. Digital orders and delivery services also contributed to the positive performance.
The international segment showed weaker results, with same-store sales declining 1.5% year over year. Franchised operations reported a 3.5% decrease in sales, which the company attributed to ongoing conflicts in the Middle East and declining trends in China.
International-owned operations experienced a 2.1% drop in same-store sales. France and the United Kingdom were identified as primary markets contributing to these declining numbers.
The company’s CEO Chris Kempczinski addressed consumer behavior in the current economic climate, noting that customers remain “mindful about their spending.” In response, McDonald’s continues to focus on “simple, everyday value and affordability.”
The quarter’s results were released amid an ongoing E. coli outbreak investigation. The outbreak has affected 75 people and resulted in one death. However, recent developments indicate progress in identifying the source.
On Sunday, McDonald’s announced plans to resume distribution of fresh beef patties to all restaurants. This decision followed the Colorado Department of Agriculture’s ruling that quarter pounder patties were not the source of the E. coli outbreak.
Current investigation efforts are focused on onions as a potential source. According to a CDC spokesperson, this would mark the first instance of onions being linked to an E. coli outbreak. The investigation remains active.
In response to these concerns, McDonald’s North America chief supply chain officer Cesar Piña stated that the issue is “contained to a particular ingredient and geography.” The company has ceased sourcing onions from Taylor Farms’ Colorado Springs facility.
As a precautionary measure, competitor Burger King removed onions from 5% of its restaurants, despite no reported illnesses connected to their establishments.
Looking ahead, Wall Street analysts have mixed views on McDonald’s prospects. Some express concern about “food safety fallout,” while others point to upcoming initiatives as positive catalysts.
These initiatives include the relaunch of the McRib in December and the introduction of a new national value platform in January. The company also plans to launch chicken strips and wraps in May or June 2025.
In terms of guest traffic, U.S. operations reported slightly negative guest counts, though this was offset by average check growth. The company’s digital presence continues to strengthen, with systemwide sales to loyalty members reaching nearly $8 billion for the quarter.
The financial impact of the E. coli outbreak will be reflected in fourth-quarter results, as the third quarter ended on September 30, before the outbreak was reported.
McDonald’s also announced a 6% increase in its quarterly cash dividend to $1.77 per share, demonstrating confidence in its financial position despite current challenges.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
