McDonald's Faces Setbacks Amid Global Sales Slump and Health Scare

McDonald's reported a larger-than-expected drop in quarterly global sales due to lower customer traffic, despite promotions. Net income dropped to $2.26 billion, down 3% from last year. The company faced challenges from E. coli outbreaks in the U.S. and weaker consumer spending in international markets.

McDonald's posted a notably larger-than-anticipated decline in quarterly global sales as it struggles with declining foot traffic, despite heightened promotional efforts following years of price hikes. Net income fell to $2.26 billion, marking a 3% decrease from the previous year. The adjusted earnings per share for the quarter reached $3.23, up slightly from last year's $3.19, yet analysts were expecting $3.20.

The global sales fell 1.5% in the third quarter, marking the largest decline in four years, surpassing analysts' anticipated 0.72% drop, as reported by LSEG data. McDonald's shares fell over 1% in pre-market trading, adding to a nearly 7% decline last week following an E. coli outbreak linked to its Quarter Pounder hamburgers, with 75 confirmed cases and at least one death.

The fast-food chain has experienced a downturn in customer visits in major markets like the U.S., Europe, and China, with more consumers opting for cost-effective home-cooked meals. To counter sluggish demand, chains are emphasizing meal bundles and limited-time offers, targeting budget-conscious patrons. CEO Chris Kempczinski emphasized a renewed focus on affordability amid ongoing consumer spending caution.

(With inputs from agencies.)