McDonald’s Enjoys Global Sales Surge Despite US Setbacks

CHICAGO, Ill. – McDonald’s reported a surprising increase in global comparable sales for the fourth quarter, driven primarily by strong demand for affordable menu items in international markets including the Middle East, Japan, and China. This unexpected uplift comes despite a more significant decline in the U.S. market due to cautious consumer spending and an earlier E. coli outbreak.

Shares of the fast-food giant surged nearly 5% in early U.S. trading on February 10, even as the company announced a 1.4% drop in its U.S. sales, the steepest decline since the pandemic began. The positive global performance stands in stark contrast to the troubles faced in the U.S. following the food safety incident linked to its Quarter Pounder burgers.

In response to consumer sentiment shifting due to perceptions tied to the Gaza conflict, demand for fast-food options in the Middle East has been stabilizing. According to Northcoast Research analyst Jim Sanderson, “Value is helping McDonald’s recover traffic from lower-income consumers, but that expansion of value will pressure store profits.”

McDonald’s has continued to position itself as a budget-friendly option in the competitive fast-food market. Initiatives such as extending the $5 meal deal, first launched in June 2024, have shown promising results. CEO Chris Kempczinski noted that this deal has encouraged U.S. diners to increase their spending, with the average transaction exceeding $10.

During an earnings call, company executives emphasized the critical need to understand the broader economic pressures, stating, “We see a cautious consumer environment where lower-income households remain sensitive to pricing.”

The company faced additional challenges in October due to a localized E. coli outbreak that temporarily forced the closure of Quarter Pounder sales in approximately 20% of its 14,000 U.S. outlets. While the CDC declared the outbreak over by early December, the negative effects lingered, particularly in areas most impacted.

Despite these setbacks, McDonald’s global same-store sales climbed 0.4% for the quarter ending December 31, outpacing Wall Street predictions of a 0.63% decline. The growth was primarily propelled by a 4.1% rise in the business segment operated by local partners in markets such as the Middle East and Japan.

McDonald’s aims to reach 50,000 units worldwide by the end of 2027, which highlights the company’s ambitious growth plans. Executives also reported fourth-quarter net income of $2.02 billion, or $2.80 per share, remaining consistent with analyst expectations.

Looking ahead, the company anticipates a challenging first quarter for 2025 but is optimistic that value menu offerings will continue to stimulate recovery. CFO Ian Borden noted, “We are projecting a headwind of 20 to 30 cents per share for the full year due to foreign currency exchange rates and economic headwinds.”

In response to lower food safety and traffic concerns, McDonald’s has plans to launch new menu items targeted at price-conscious consumers in the near future, reinforcing their commitment to recovery and growth.