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Analysts expected oil to surge above $200 but China has quietly kept prices half of that—and can’t for much longer

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FinanceMcDonald's

McDonald’s $5 value meals save third quarter U.S. sales but E. coli outbreak hangs over recovery

By
Dee-Ann Durbin
Dee-Ann Durbin
and
The Associated Press
The Associated Press
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By
Dee-Ann Durbin
Dee-Ann Durbin
and
The Associated Press
The Associated Press
Down Arrow Button Icon
October 29, 2024, 7:33 AM ET
A Quarter Pounder hamburger meal at a McDonald's on October 23, 2024 in the Flatbush neighborhood in the Brooklyn borough of New York City.
A Quarter Pounder hamburger meal at a McDonald's on October 23, 2024 in the Flatbush neighborhood in the Brooklyn borough of New York City. Michael M. Santiago—Getty Images

Value meals helped turn around McDonald’s U.S. sales in the third quarter with customers smarting from higher prices all over, but that recovery could be dented in the final months of the year by an E. coli outbreak tied to the company’s Quarter Pounder hamburgers.

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U.S. same-store sales — or sales at stores open at least a year — rose 0.3% in the July-September period, the company said Tuesday. McDonald’s launched a $5 value meal in late June after a disappointing second quarter, and it said the value message resonated with consumers.

The $5 deal was so successful that McDonald’s recently extended it to December at most of its U.S. stores.

But last week, a crisis hit. McDonald’s pulled Quarter Pounders off the menu at 900 stores after the U.S. Food and Drug Administration determined that the burger’s slivered raw onions were the likely cause of E. coli contamination. The outbreak has killed one person and sickened at least 75 others across 13 states.

McDonald’s said Sunday it has stopped getting onions from that supplier and expects to put the Quarter Pounder — without onions — back on all of its U.S. menus soon. But it’s not yet clear how much the recall hurt demand.

McDonald’s also struggled outside the U.S. in the third quarter. Chinese demand was weak as the that nation’s economy slows, with customers choosing cheaper rivals, and the company has also been hurt by the war in the Middle East.

McDonald’s same-store sales fell 1.5% companywide during the third quarter. That was worse than the 0.6% decline Wall Street was predicting, according to analysts polled by FactSet.

McDonald’s revenue rose 3% to $6.87 billion for the quarter. That was slightly higher than the $6.82 billion analysts were predicting.

McDonald’s net income fell 3% to $2.25 billion. Adjusted for one-time items, including the costs associated with acquiring McDonald’s business in Israel, the company earned $3.23 per share, which was higher than the $3.21 per share Wall Street was expecting.

Shares of McDonald’s Corp. were flat before the opening bell Tuesday.

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