New York, NY – McDonald’s achieved lower than expected sales growth in the fourth quarter of last year, reporting a global same-store sales increase of 3.4% compared to the anticipated 4.79%. In the US, sales growth reached 4.3%, below the 4.45% increase that Wall Street had predicted. This performance contrasts with the 8.8% increase in same store sales that McDonald’s saw in the third quarter of last year.
Despite falling short of expectations, the company reported an 18% increase in adjusted earnings per share for the fourth quarter, reaching $2.95, and an 8% jump in total revenue, totaling $6.41 billion. For the fiscal year of 2023, McDonald’s revenue reached $25.49 billion, marking a 10% increase from the previous year.
CEO Chris Kempczinski attributed the lower sales growth to macro challenges that are expected to persist in 2024. He expressed confidence in the company’s resilience amidst these challenges and highlighted the success of the growth plan “Accelerating the Arches,” which has contributed over 30% to the company’s same store sales growth since 2019.
Sales growth in the US was driven by larger check sizes, increased menu prices, and successful marketing campaigns like the return of the McNugget Buddies and Happy Meal Squishmallows. However, international operated markets saw a decrease in same store sales growth, particularly in Latin America and Asia, where sales were affected by the war in the Middle East.
McDonald’s loyalty program played a crucial role in its performance, with loyalty members generating $6 billion in sales in the fourth quarter across 50 markets, and over $20 billion across fiscal 2023, representing a 45% increase from the previous year.
Despite the lower sales growth, analysts remain optimistic, with some projecting sustained same-store sales growth in the near term. Additionally, McDonald’s is planning a significant expansion, aiming to grow its number of locations to 50,000 by 2027 and increase its loyalty program membership from 150 million to 250 million.
In summary, McDonald’s fourth-quarter performance, while falling short of expectations, still showed resilience and potential for future growth. With a focus on innovation, marketing, and digital investment, the company aims to continue its upward trajectory in the coming years.