McDonald’s U.S. sales saw a slight improvement in the third quarter, thanks to the success of their $5 value meal deal which attracted lower-income customers. However, their sales momentum might be affected in the upcoming months due to an E. coli outbreak linked to their Quarter Pounder hamburgers. The outbreak, which has resulted in one death and numerous illnesses, forced the company to remove Quarter Pounders from the menu at around 3,000 stores.
McDonald’s CEO, Chris Kempczinski, apologized for the outbreak and assured customers of their commitment to safety. The company has ceased sourcing onions from the supplier in question and plans to reintroduce the Quarter Pounder on all U.S. menus shortly, albeit without onions at some locations. Despite efforts to contain the situation, the outbreak has impacted sales, resulting in a decline in U.S. visits to McDonald’s. The company aims to regain customer trust by cooperating with authorities and promoting their value offers.
Internationally, McDonald’s faced challenges in markets like China and the Middle East, leading to a companywide decline in same-store sales during the third quarter. To improve sales in regions like France, McDonald’s introduced value deals such as a 4-euro Happy Meal and $1 coffee in Canada. The company plans to focus on value in the U.S. during the first quarter of the next year, potentially implementing a mix of low-priced items, meal deals, and digital offers to attract customers.
Despite the setbacks, McDonald’s reported a 3% increase in revenue to $6.87 billion for the quarter, slightly exceeding analysts’ predictions. However, the net income fell by 3% to $2.25 billion, largely attributed to one-time costs associated with acquisitions. Adjusted earnings per share were higher than expected at $3.23. McDonald’s stock saw a minor decline in trading following the announcement of their financial results. The company remains committed to addressing the E. coli outbreak and implementing strategies to drive sales growth in the future.
