McDonald's Corporation (MCD.US) performance mixed: E. coli incident leads to sluggish US market, international market exceeds expectations.

International restaurant giant McDonald's Corporation (MCD.US) saw an increase in overall same-store sales in the fourth quarter, with stronger-than-expected performance in international markets offsetting a decline in the US market. Financial data showed that McDonald's Corporation's global same-store sales unexpectedly grew by 0.4% in the fourth quarter, surpassing analysts' general expectations of a decrease. This broke McDonald's Corporation's trend of two consecutive quarters of negative growth in same-store sales, with the previous declines attributed to global consumers dining out less and a boycott wave sparked by the conflict between Israel and Hamas. On the downside, McDonald's Corporation's performance in the US market was weak, with a 1.4% year-on-year decline in same-store sales in the fourth quarter, exceeding analysts' expectations. Although customer traffic saw a slight increase, the average order amount decreased compared to the same period last year, as the higher prices helped McDonald's Corporation increase consumer spending. As of 2024, McDonald's Corporation's global restaurant count has reached 43,477, representing a growth of about 4% from the previous year. McDonald's Corporation's fourth-quarter earnings per share were $2.83 (excluding certain special items), slightly lower than the previous year and slightly below analysts' general expectations. Overall, comprehensive sales were flat compared to the same period last year. During the fourth quarter reporting period, McDonald's Corporation faced an E. coli outbreak in the US, resulting in one death and over 100 infections, scaring off many long-term customers of McDonald's Corporation in the US. McDonald's Corporation pledged to invest $100 million to restore customer confidence. Additionally, the fast-food giant also ramped up efforts to promote a $5 meal deal to combat its perception of high food prices. On October 22, 2024, the Centers for Disease Control and Prevention (CDC) announced a severe E. coli infection outbreak in the US related to McDonald's Corporation. A burger sold at some McDonald's Corporation stores was contaminated with O157:H7 E. coli and had infected a total of 104 people in 14 states, resulting in at least 34 hospitalizations and one death. On December 3, 2024, the CDC announced that the E. coli outbreak related to onion slices supplied by McDonald's Corporation had ended. The soft performance in the US market was offset by strong performances in two international business segments, including the Japan and Middle East markets, showing a same-store sales growth of 4.1% in the financial report, which analysts generally expected to decline in this type of international business segment. However, the company's leadership warned that the conflict between Israel and Hamas has severely damaged the Middle East business and the negative impact may continue until the end of the war. Another international business segment of McDonald's Corporation, including markets such as France and the UK, unexpectedly showed flat performance, compared to analysts' original expectations of a significant decline in same-store sales in this type of international market segment. The fourth quarter marked a busy year for McDonald's Corporation, including the E. coli outbreak in the US, which not only resulted in one death but also infected over 100 people, significantly affecting customer trust and loyalty. Therefore, McDonald's Corporation announced a $100 million investment to restore customer confidence. With stronger-than-expected same-store sales, especially strong performance in international markets, the company's stock price rose 2.2% in pre-market trading in New York on Monday. Currently, McDonald's Corporation's stock price is almost flat compared to twelve months ago, mainly due to the E. coli incidents and weak consumer spending among the US middle and low-income groups, while the US stock market index - the S&P 500 index has risen by 20.6%. Last year, McDonald's Corporation launched some global promotional activities aimed at continuously attracting customers who are tired of inflation rates and economic downturns, including offering coffee starting at 1 Canadian dollar in Canada and introducing a 4 happy meal in the French market. In addition to the ultra-value meal deals in the US, the company also attracted more customers through promotions such as the Halloween bucket and limited-time whipped cream frappuccino/ltd. edition caramel pudding. In terms of performance outlook, McDonald's Corporation stated that it expects the operating profit margin to fluctuate in the range of 45% - 49%. The company also plans to invest $3 billion to $3.2 billion, primarily for opening new restaurants in the US and some international markets.