McDonald’s Q4 Earnings Fall Short, Value Meals and E. Coli Blamed

The fourth-quarter earnings report for McDonald’s revealed some disappointing numbers. The fast-food giant posted lower-than-expected numbers as an E. coli outbreak adversely affected sales and low margins on promotional menu deals squeezed profits.

McDonald’s revenue in Q4 2024 was $6.39 billion, but analysts were looking for $6.44 billion, according to CNBC. Income for the three-month period that ended on Dec. 31 dropped to $2.02 billion, compared to $2.04 billion in Q4 2023. Net sales were about the same year-over-year, coming in at $6.39 billion.

In the U.S., same-store sales, a measure of revenue from McDonald’s locations open at least a year, fell 1.4%. The decline was worse than expected, as analysts were projecting a loss of only 0.6%. Globally, same-store sales climbed 0.4%.

Customer traffic, however, was up in the quarter, but the average amount spent per order was lower. The introduction of the $5 combo meal was successful in attracting diners last year, but it failed to help increase overall sales as customers did not add more expensive items to orders as anticipated.

McDonald’s E. Coli Outbreak

Throughout the last quarter, McDonald’s was dealing with a major health issue related to one of its signature menu items — a problem that seemingly dragged down sales as well. The restaurant’s Quarter Pounders were linked to a multi-state E. coli outbreak in October 2024.

As soon as the news broke about the E. coli breakout, traffic at many U.S. McDonald’s locations plummeted. The Centers for Disease Control and Prevention (CDC) declared the event over in early December, but not before dozens of customers in 14 states were sickened and one died.

At first, the E. coli contamination was linked to the onions added on top of the hamburger patty. Ultimately, the Food and Drug Administration (FDA) reported the source was dirty equipment at a supplier’s processing plant.

McDonald’s international stores were not impacted by the E. coli outbreak. Beyond the U.S. market, same-store sales were strong, which helped the overall numbers posted in the earnings report.

About 2,200 new McDonald’s restaurants will open in 2025, with 25% of them appearing in established markets like the U.S. Also, this year, the fast-food giant intends to expand its chicken menu options, including a return of the Chicken Big Mac for a limited time.