However, increased overseas sales helped McDonald’s offset some domestic losses in the fourth quarter, and the company has stated that it anticipates an increase in U.S. sales later this year.
Following an E. coli issue involving its Quarter Pounder hamburgers last fall, McDonald’s says that their sales are still improving. The well-known Chicago burger joint revealed that, even after increasing its bargain selection, it still had trouble drawing in lower-class customers.
McDonald’s same-store sales fell 1.4% in the fourth quarter.
Which are revenues from locations that have been open for at least a year. In a Monday conference call with investors, McDonald’s chairman, president, and CEO Chris Kempczinski revealed that the company’s sales of fast food to low-income Americans fell by double digits between October and December.
We are trying to figure out how to get over that terrain. Kempczinski clarified that a comprehensive value program must be put into place.
McDonald’s had a decline in sales in the US in the first half of 2024 as a result of disgruntled customers over continuous pricing increases. In June, the business saw an uptick in visitation after offering a $5 value dinner. Because of the success of the transaction, the company chose to extend it until the following summer.
According to the U.S. Food and Drug Administration, an E. coli outbreak has hospitalized 34 people and sickened at least 104 people in 14 states. On October 22, the pandemic was first noted. In Colorado, one person died from fatal injuries.
In December, the Food and Drug Administration (FDA) closed its investigation into the outbreak after McDonald’s stopped providing raw onions linked to the virus, claiming that McDonald’s had successfully limited the epidemic. According to Kempczinski, the virus had a negative effect on Quarter Pounder sales, which are usually a significant source of income.
According to Kempczinski, sales in the outbreak’s epicenter, the Rocky Mountains, are still down. McDonald’s, the fast food chain, believes it won’t fully recover until the second quarter, which starts.
Prior to introducing new goods and services, McDonald’s stated that it is working to increase customer traffic in the US in order to generate excitement and increase spending.
McDonald’s may return snack wraps this year.
A menu item that has created a lot of interest, along with a new chicken strip product. Kempczinski claims that from the beginning of the previous year, the company has been experimenting with the beverage-focused CosMc’s franchise.
Additionally, the business is learning a lot about the market for goods like energy drinks. According to Kempczinski, the company is working to figure out how to meet that demand at its current restaurants.
The fourth quarter saw a slight increase in international sales in markets under management, with Germany and Italy exhibiting especially strong sales. On the other hand, Kempczinski asserted that McDonald’s is also having trouble drawing in clients from lower socioeconomic groups in the UK.
The 4.1% gain in same-store sales that McDonald’s recorded in licensed markets outside of the US was the high point of the fourth quarter. Given the recent poor sales in Japan and the Middle East, McDonald’s announced large price increases to combat the problem.
In the fourth quarter, McDonald’s restaurants around the world saw a less than 1% improvement in comparable store sales performance. FactSet polled analysts, and the findings were better than the 1.1% loss Wall Street had predicted. Sales for the fourth quarter came to $6.38 billion, which was somewhat less than the $6.45 billion analysts had predicted.
In addition, the company’s fourth-quarter net income of $2.01 billion represented a 1% decrease. McDonald’s reported earnings of $2.83 per share after correcting for nonrecurring factors, which was less than the $2.85 per share that Wall Street had anticipated.
During Monday’s first trading hours, McDonald’s stock increased by more than four percent.
SOURCE: AP
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