McDonald's (MCD, Financial) recently released its third-quarter financial results for the period ending September 30, 2024. The company reported revenue of $6.873 billion, marking a 2% increase year-over-year. However, net profit fell by 3% to $2.255 billion. For the first three quarters of 2024, McDonald's revenue grew by 2% to $19.532 billion, while net profits declined by 3% to $6.207 billion.
Global same-store sales dipped by 1.5% during the third quarter. Although the U.S. market saw a slight uptick in same-store sales by 0.3%, international markets like France and the UK experienced declines. The continuous impact of Middle Eastern conflicts and reduced sales in China also affected performance.
In the U.S., the increase in average check size contributed to growth despite a slight drop in customer traffic. Marketing campaigns focusing on core menu items, effective execution at the restaurant level, and the growth of digital and delivery services helped support this rise in sales.
Looking ahead, McDonald's expects capital expenditures to range between $2.5 billion and $2.7 billion in 2024, with over half dedicated to new restaurant expansions. The company plans to open over 2,100 new locations globally, with a net increase of more than 1,600 restaurants.
As of September 30, 2024, McDonald's operates over 42,819 locations in more than 100 countries, having added 1,621 new outlets compared to the previous year. In China, the current store count stands at 6,543, with an increase of 961 stores year-over-year, primarily expanding into lower-tier cities. By 2028, the company aims to open 10,000 new restaurants, with half in third, fourth, and fifth-tier cities.
In the U.S., McDonald's is testing the success of low-priced meal options. A recently introduced $5 meal package has been popular among lower-income consumers, driving traffic.
During a recent earnings call, McDonald's management addressed a recent food safety incident. On October 22, the U.S. Centers for Disease Control and Prevention issued a food safety alert linking an E. coli outbreak to one of McDonald's burgers. McDonald's China confirmed that they neither sell nor use the implicated product or ingredients and adhere to strict legal and quality standards. Although the incident temporarily affected daily sales and traffic, McDonald's does not expect it to have a significant long-term impact on business operations.
