McDonalds meal deals are slowly winning customers back to U.S. stores, but people are spending less
www.fastcompany.com
After a year of dominating U.S. headlines for everything from a major E. coli outbreak to a visit from Donald Trump, McDonalds today announced its fourth-quarter and full-year 2024 financial report.Heres a quick look at the numbers:Fourth-quarter revenue was $6.4 billionFourth-quarter net income was $2.2 billionFull-year revenue was $25.9 billionFull-year net income was $8.2 billionGlobal comparable sales increased by 0.4% in the fourth quarter, while U.S. comparable sales dropped by 1.4% in the same period. (Thats compared to a 4.3% gain in the fourth quarter last year.)The data shows that while McDonalds has made progress globally, U.S. numbers remain sluggish as the chain struggles to strike the right balance between fair prices and profit.The $5 meal deal: A financial mixed bagOver the past several months, McDonalds has been on a mission to dispel its reputation as a villain of the American inflation story. In a LendingTree survey last May, 65% of respondents said theyd been shocked by a fast food bill in the past six months, while 80% said they considered fast food to be a luxury. Plenty of ire has been directed at McDonalds for its perceived role in contributing to unaffordable fast food costs.To combat that perception and win customers back, McDonalds launched a $5 value meal in June. While the deal was meant to be a limited-time offering, the campaigns popularity (and financial payoff; its been credited for saving the chains third quarter) led McDonalds to extend the $5 meal into December 2024. Then, in November, McDonalds once again promised to offer its value meal for at least the first half of 2025.On an earnings call today, a McDonalds spokesperson shared that Q4 was the companys best quarter of the year with the American low-income consumer segment. However, per the financial report, the 1.4% drop in U.S. comparable sales could be attributed to a decline in average check, partly offset by slightly positive comparable guest countsmeaning that, as customers are spending less per meal, McDonalds is having trouble recouping the difference.The impact of the E. coli outbreak continuesTheres another reason for McDonalds lackluster fourth quarter in the U.S., according to CEO Chris Kempczinski: the lasting impact of last years E. coli outbreak, which sent the companys stock into a tailspin at the time.Our fourth-quarter performance reflects the impact of the food incident, Kempczinski said during todays earnings call.The outbreak, which emerged in late October, sickened dozens of McDonalds customers and killed one person, causing the company to temporarily remove its Quarter Pounder from thousands of stores.Months later, it seems like the company is still working to regain consumers trust as it continues to navigate a rocky economic climate. Nevertheless, investors are relatively optimistic about the companys outlook: As of this writing, shares of McDonalds (NYSE: MCD) are up almost 5%, to about $309 per share.
0 Comentários ·0 Compartilhamentos ·54 Visualizações