McDonald's Q4 revenue and profit both decline, U.S. same-store sales hit the largest drop in nearly five years | Financial Report Insights

Due to poor stock performance, weak sales, and the ongoing impact of the previous "E. coli outbreak" incident, McDonald's reported a decline in both revenue and profit for the fourth quarter, with same-store sales in the U.S. experiencing the largest drop in nearly five years.

On Monday, February 10, McDonald's disclosed its fourth-quarter financial report for 2024, showing that:

1) Key Financial Data:

Revenue was $6.39 billion, a year-on-year decrease of 0.3%, below the expected $6.45 billion.

Earnings per share were $2.80, unchanged from the same period last year; adjusted earnings per share were $2.83, down from $2.95 a year earlier and below the expected $2.84.

Net profit was $2.02 billion, a year-on-year decrease of 1%.

Operating profit was $2.87 billion, a year-on-year increase of 2%.

McDonald's plans to attract customers again in 2025 through its McValue menu platform and new products such as chicken strips, chicken nuggets, and wraps.

In pre-market trading, McDonald's shares rose 1.58%.

Same-store sales growth in the fourth quarter was only slight, with a significant decline in growth rate

Data shows that McDonald's same-store sales in the fourth quarter increased by 0.4% year-on-year, down from 3.4% growth in the same period last year, but higher than the expected -0.93%. Among them, same-store sales in the U.S. experienced the largest decline in nearly five years, as consumers remain wary due to the previous "E. coli outbreak incident."

Specifically:

U.S.: Same-store sales decreased by 1.4%, down from a 4.3% increase in the same period last year, exceeding the expected decline of 0.41%. This quarter saw a slight increase in customer traffic compared to last year, but this growth was offset by a decrease in the average spending amount per customer visit.

International Operating Markets: Same-store sales increased by 0.1%, with most markets showing positive same-store sales, offsetting weak sales in the UK market.

International Development License Markets: Same-store sales increased by 4.1%, exceeding the expected decline of 0.43%, with the Middle East and Japan markets being the main drivers of this growth.

BTIG analyst Peter Saleh warned that the company is overly reliant on discounts, which currently account for more than one-third of sales, potentially putting pressure on franchise profit margins.

Wedbush analyst Nick Setyan believes that even if McDonald's performs poorly in the first half of the year, a positive and sustained recovery story will emerge in the second half