On October 29th local time, McDonald's (MCD: US) announced its third quarter performance as of September 30th, 2024, achieving a revenue of 6.873 billion US dollars, a year-on-year increase of 2%; Achieve a net profit of 2.255 billion US dollars, a year-on-year decrease of 3%; Revenue for the first three quarters of 2024 was $19.532 billion, a year-on-year increase of 2%; Net profit was 6.207 billion US dollars, a year-on-year decrease of 3%.
In the third quarter, McDonald's global same store sales decreased by 1.5% year-on-year, but same store sales in the United States increased by 0.3%. McDonald's stated in its financial report that same store sales have declined in multiple regions of the international market, with poor performance in the French and UK markets; On the other hand, it is also affected by the ongoing conflict in the Middle East and the decline in same store sales in China.
As for the increase in same store sales in the US market, McDonald's stated that the average bill amount has increased, but this growth has been offset by a slight decrease in customer traffic. Fortunately, the marketing campaign featuring the core menu, good execution at the restaurant level, and sustained growth in digitalization and delivery business have driven a slight increase in same store sales.
McDonald's expects its capital expenditures to be between $2.5 billion and $2.7 billion in 2024, with over half of it going towards the expansion of new restaurants. Worldwide, the company expects to open over 2100 new restaurants by 2024. The company expects a net increase of over 1600 restaurants in 2024.
In terms of store size, the financial report shows that as of September 30, 2024, McDonald's had over 42819 branches in more than 100 countries, an increase of 1621 stores compared to the same period last year; McDonald's China has 6543 stores, an increase of 961 compared to the same period last year. As the number of McDonald's stores in China increases, it is also expanding into lower tier cities in China.
Before the era of "Golden Arches", McDonald's focused more on market development in first and second tier cities. Currently, approximately 50% of McDonald's restaurants are located in third -, fourth -, and fifth tier cities. By 2028, half of the 10000 restaurants that McDonald's plans to open will also be located in lower tier cities.
In the US market, McDonald's is also exploring the effectiveness of low-priced meal plans. McDonald's management stated during a conference call after the release of its financial report that the company's $5 package launched in the United States has been favored by lower income consumers and has driven foot traffic.
McDonald's management also responded to recent food safety incidents during this conference call. On October 22nd local time, the Centers for Disease Control and Prevention in the United States issued a food safety alert, stating that the E. coli outbreak is related to a certain burger from McDonald's.
On October 23rd, McDonald's China replied to First Financial, stating that McDonald's China does not sell the products mentioned in the news and does not use related ingredients. McDonald's strictly adheres to legal and regulatory requirements as well as quality management standards.
Regarding the food safety and quality accident, McDonald's management stated during the conference call that daily sales and customer traffic have indeed decreased after the incident. However, the company expects that this accident will not have a significant impact on its business.