McDonald’s Earnings Report: What to Expect Amid Challenges and Slow Recovery

McDonald’s is set to release its fourth-quarter earnings report on Monday, with analysts expecting the fast-food giant to show another quarter of same-store sales declines, CNBC reports.

The company has faced some challenges during the period, particularly following a health scare linked to its Quarter Pounder burgers.

In the last quarter, US restaurant traffic took a hit after the Centers for Disease Control and Prevention (CDC) tied a fatal E. coli outbreak to McDonald’s Quarter Pounder burgers. The outbreak was traced back to slivered onions, leading McDonald’s to switch suppliers for the ingredient. While the CDC officially declared the outbreak over in December, customer visits to McDonald’s US locations dropped sharply in the aftermath, especially in the affected states. Though traffic has been gradually recovering, analysts still anticipate a decline in the company’s US same-store sales by about 0.6% for the quarter, according to StreetAccount estimates.

Overall, McDonald’s is expected to report a 1% drop in same-store sales, marking the third consecutive quarter of declines in this key metric for the company. Despite these struggles, McDonald’s shares have increased by 2% over the past year, bringing the company’s market capitalization to approximately $211 billion.

Wall Street analysts, surveyed by LSEG, are forecasting the following for McDonald’s upcoming earnings report:

• Earnings per share: $2.83 expected
• Revenue: $6.44 billion expected

Despite the challenges faced during the quarter, McDonald’s did see some positive momentum after introducing a value meal and permanently adding the Chicken Big Mac to its menu in early October, helping to boost sales after a mid-year slowdown. However, the lingering impact of the E. coli outbreak appears to have overshadowed the recovery in some markets, leading to the expected declines.