McDonald’s reported quarterly results that outpaced analyst expectations as consumers responded to a series of value promotions and marketing initiatives. For the three months ended Dec. 31, comparable global same-store sales rose 5.7%, topping the LSEG consensus of a 3.7% increase. The company’s adjusted earnings per share were $3.12, up from $2.83 a year earlier and ahead of the $3.05 analysts had forecast. Following the release, McDonald’s shares traded about 2% higher in after-hours trading.
The fast-food chain, which operated more than 43,400 restaurants worldwide at the end of 2024, has shown resilience while many restaurant operators face slipping traffic as consumers tighten budgets. Lower-priced options generally performed better across the industry: Taco Bell reported a 7% rise in same-store sales in the quarter, and KFC posted a 3% increase, both reported by Yum Brands. In contrast, Chipotle Mexican Grill’s sales fell 1.7% in its most recent report earlier in February.
McDonald’s management highlighted a string of value initiatives as a key driver. In October the company reinstated its Monopoly promotion after nearly a decade, followed by November value offerings that included $5 breakfast choices and $8 lunch and dinner meals. In December, McDonald’s added a limited-time holiday Grinch meal to the lineup. "McDonald’s value leadership is working," CEO Chris Kempczinski said in a company statement accompanying the results.
On a geographic basis, U.S. comparable sales rose 6.8% in the October-to-December period, marking the third straight quarter of growth and a notable rebound from a 1.4% decline a year earlier when demand was affected by an E. coli outbreak. Analysts had been modeling a 4.9% increase for the quarter. In the company’s business segment, where restaurants are run by local operators, sales climbed 4.5% led by performance in Japan. International market sales increased 5.2%, driven by demand in Britain, Germany and Australia.
Overall revenue for the quarter reached $7.01 billion, a 10% year-over-year increase, and net income rose 7% to $2.16 billion. These top-line and profit gains accompany management’s continued investment in promotional activity and testing of new product lines intended to boost profitability and frequency of visits.
Beyond value pricing, McDonald’s is pressing further into beverages, a segment executives have described as higher-margin and capable of increasing customer visits. Late last year the company piloted an expanded drink menu at 500 restaurants in Wisconsin, Colorado and nearby markets, introducing cold coffees, crafted sodas and energy-style beverages aimed at younger consumers. Executives were scheduled to discuss the pilot’s results on the company’s earnings call later in the evening.
Analysts at BTIG noted that a national rollout of the broader beverage lineup could materially lift same-store sales and traffic, providing McDonald’s with another lever to drive visits beyond its value promotions.
Management has emphasized that the current consumer environment remains challenging, with restaurant prices rising faster than groceries in recent months - a dynamic largely attributed to higher labor and utility costs. Those cost pressures have led some diners, especially in lower-income households, to cut back on eating out, intensifying competition among quick-service operators. "This is an environment where you’ve just got to grind it out," Kempczinski said in November, referencing the strain U.S. consumers face from increases in rent, childcare and grocery expenses.
McDonald’s fourth-quarter performance highlights the ways value promotions and product experimentation can sustain traffic and sales in a constrained consumer spending backdrop. The company’s quarterly results combined stronger-than-expected same-store sales, rising revenue and higher adjusted earnings per share, while management continues to test new offerings and monitor consumption patterns across markets.
Data points cited in this report
- Global comparable same-store sales: +5.7% (three months ended Dec. 31); consensus +3.7% (LSEG)
- U.S. comparable sales: +6.8% (Oct-Dec); consensus +4.9%
- Adjusted earnings per share: $3.12 vs $2.83 a year earlier; consensus $3.05
- Revenue: $7.01 billion (+10%)
- Net income: $2.16 billion (+7%)
- Global restaurants: more than 43,400 at end of 2024
- Promotions: Monopoly return in October; $5 breakfast and $8 meal offers in November; holiday Grinch meal in December
- Beverage pilot: expanded drink lineup tested at 500 restaurants in Wisconsin, Colorado and nearby markets