McDonald’s customers aren’t “lovin’ it.”
The fast-food giant missed Wall Street’s expectations for the fourth quarter, largely due to the lingering effects of an E. coli outbreak and ongoing inflation pressures. The October incident sickened hundreds of customers and caused a massive drop in foot traffic, leading to a decline in same-store sales. In early trading, McDonald’s shares were slightly up.
“Our fourth-quarter performance reflects the impact of the food incident,” CEO Chris Kempczinski said during the company’s Feb. 10 earnings call.
The Illinois-based company reported revenue of $6.39 billion, missing Wall Street’s forecast of $6.44 billion in revenue, while earnings per share came in at $2.80 — meeting expectations. Additionally, U.S. same-store sales fell 1.4% year-over-year, surpassing the Street’s modest projection of 0.6%.
The impact of the E. Coli outbreak, which began in late Oct. 2024, has started to reveal the toll it took on McDonald’s performance. Citi analyst Jon Tower said in a research note that he believes the outbreak marked the company’s “low point” and sees the coming quarter as “setting the table” for a recovery. However, inflation remains a challenge and is expected to persist in the near future.
Jan. 2025 was another tough month for McDonald’s, despite optimism surrounding its McValue platform. BTIG analyst Peter Saleh noted that severe weather conditions across the U.S. complicated efforts to determine whether the value menu had increased foot traffic.
In a note covering the restaurant industry, Bank of America set a 12-month price target of $312 for McDonald’s, reflecting steady growth expectations despite the challenges of its franchised business model. In Nov. 2024, the company announced a $100 million investment to support marketing efforts and franchisee operations. About 95% of U.S. locations are run by franchisees.
BoA highlighted both upside and downside risks: Stronger-than-expected sales and cost savings could boost McDonald’s stock, while slow sales and margin pressure from inflation could weigh on its performance.
According to foot-traffic analytics firm Placer.ai, inflation likely contributed to dips in McDonald’s visits, while budget-conscious consumers flocked to limited-time offers and special releases. The company has capitalized on this trend, driving significant foot traffic with the June launch of its $5 Meal Deal. Additionally, the Chicken Big Mac, introduced in Oct. 2024, drove a 7.2% increase in visits during its first week.
The promotions help McDonald’s maintain its relevance. The company recently launched a “McValue” menu, expanding on its $5 meal deal. It’s also bringing back the Shamrock Shake.
Other nostalgic promotions, such as collector’s cups relaunched in Aug. 2024, have proven extremely successful. The cups were so popular that customers resold them on third-party websites such as eBay for as much as $100 each.
Elsewhere, McDonald’s also made headlines in Oct. 2024 when President Donald Trump staged a cook shift at a Pennsylvania location. The company quickly clarified it had no involvement in the event, noting that it was not “red or blue, but golden.”
In Jan. 2025, McDonald’s announced it would scale back its Diversity, Equity, and Inclusion (DEI) efforts, joining the likes of Google, Meta, and Walmart — but not Costco.