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.
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 around 3,000 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. It expects to put the Quarter Pounder back on all of its U.S. menus within the week, although it will be served without onions at 900 stores. 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 down nearly 2% before the opening bell Tuesday.
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