Business
McDonald’s Misses Revenue Targets as U.S. Customers Spend Less
By Jake Beardslee · February 10, 2025
McDonald’s Revenue Falls Short Amid U.S. Sales Slump
McDonald’s reported disappointing quarterly revenue, missing Wall Street expectations due to weakened U.S. sales—the most significant decline since the COVID-19 pandemic. Despite the revenue shortfall, the company's stock surged more than 4% as executives remained optimistic about a recovery in 2025.The fast-food giant posted adjusted earnings per share of $2.83, aligning with analysts’ expectations. However, revenue stood at $6.39 billion, falling short of the anticipated $6.44 billion. While overall same-store sales grew by 0.4%, McDonald’s U.S. division suffered a sharper-than-expected 1.4% decline in same-store sales, compared to Wall Street’s projected 0.6% drop. Megan Mendoza/The Republic / USA TODAY NETWORK via Imagn Images
E. Coli Outbreak Weighs on U.S. Sales
The downturn in U.S. sales was primarily driven by reduced consumer spending and the lingering impact of a severe E. coli outbreak, which the Centers for Disease Control and Prevention linked to the company's Quarter Pounder burgers in late October. McDonald’s swiftly replaced its onion supplier—the likely source of the outbreak—and the CDC declared the issue resolved by early December. However, the damage had been done, with McDonald’s witnessing a sharp drop in customer traffic, particularly in heavily affected states. Evan-Amos / Wikimedia
Value Deals Drive Sales, But Concerns Linger
To combat the downturn, McDonald’s relied on value-driven promotions, including a $5 combo meal launched in the summer. While this deal temporarily bolstered sales, analysts cautioned that such promotions only succeed when customers also purchase non-discounted menu items. In response, McDonald’s executives defended their strategy, noting that the average check for the $5 meal deal exceeds $10.CEO Chris Kempczinski expressed confidence in the company’s ability to recover, stating, according to CNBC, “I think right now what we’re seeing is that the E. coli impact is now just localized to the areas that had the biggest impact… think about that as sort of the Rocky Mountain region that was really the epicenter of the issue.”
Looking ahead to 2025, McDonald’s plans to revamp its menu with the reintroduction of snack wraps and a new chicken strip offering. Executives anticipate U.S. sales will rebound by the start of the second quarter. www.mcdonalds.com
Strong International Sales Offset U.S. Decline
While U.S. sales faltered, McDonald’s international operations posted stronger results. The company’s international developmental licensed markets segment—which includes the Middle East and Japan—saw same-store sales grow by 4.1%. Meanwhile, its international operated markets division, encompassing major regions such as Europe, experienced a slight same-store sales increase of 0.1%. Martin Lewison / Wikimedia
Expansion Plans Continue Despite Challenges
Despite the challenges, McDonald’s remains committed to expansion, with plans to open approximately 2,200 new restaurants in 2025. Of these, about 1,000 will be located in China, while a quarter will be in the U.S. and key international markets, according to Business Insider. The company has allocated $3 billion to $3.2 billion for capital expenditures, including restaurant development. メイド理世 / Wikimedia