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McDonald's profits dented by food poisoning outbreak / Photo: © AFP
McDonald's profits dented by food poisoning outbreak
McDonald's reported a dip in profits Monday as it contended with lingering effects from a US food poisoning outbreak that depressed sales in its home market.
The fast-food giant, which faced an E. coli outbreak centered in the western United States last fall, also pointed to lagging sales from inflation-weary customers in the United States, Britain and other markets.
Chief Executive Chris Kempczinski said the company's performance in 2024 "did not meet our expectations," but praised staff for swiftly addressing the food poisoning, which was linked to onions in the popular Quarter Pounder hamburgers.
US comparable sales fell 1.4 percent during the fourth quarter.
The company's profits slipped one percent to $2 billion, while revenues were essentially flat at $6.4 billion.
Kempczinski said the chain's sales still lagged somewhat in the Rocky Mountain region, where the outbreak occurred.
"At this point, it's just contained to that region whereas the rest of the US, we don't see an impact," said Kempczinski, who predicted a full US recovery by the beginning of the second quarter.
Sales hit a trough soon after the late-October outbreak, but improved later in the quarter as McDonald's bolstered marketing campaigns and value promotions, executives said on an earnings conference call.
In all, the outbreak accounted for 104 cases across 14 states. There were 34 hospitalizations and one fatality, according to the US Centers for Disease Control and Prevention.
Kempczinski described the broader US market as "pretty muted," noting that sales from lower-income consumers have dropped double digits across the fast food industry. By contrast, activity from middle- and higher-income shoppers is "very robust," he said.
"It's so important that we make sure we have a strong value program," Kempczinski said.
Company officials said they were on track with a plan to add new restaurants in the United States and in some overseas markets.
The chain plans to spend between $3 billion and $3.2 billion this year, adding around 3,800 restaurants, including roughly 1,000 in China and hundreds in the United States.
Shares of McDonald's rose 4.8 percent near midday.
D.Gu--SG
