McDonald’s bumpy end to last year—and the additional turbulence it expects in 2024—won’t slow down its plans to reach 50,000 restaurants globally by 2027, a company spokesperson told Quartz on Monday (Feb. 5).
Struggles in the fourth quarter and beyond
McDonald’s sales of $25.4 billion for the 2023 fiscal year fell about 0.2% short of Wall Street’s expectations Monday, according to analysts surveyed by FactSet. The company’s stock dropped more than 3% in morning trading after the news.
As with other big food brands, its international sales were hurt in the fourth quarter by the Israel-Hamas war.
The fast food chain said the issues it faced last year—war and inflation—will persist.
“We continue to operate in a challenging environment with varying levels of headwinds across our markets,” CEO Ian Borden told investors on a call. “Looking ahead to this year, we anticipate these headwinds will continue as the current macro dynamics continue to weigh on both our consumers and our business results, along with the war in the Middle East.”
Notably, company profits in 2023 were still nearly 40% higher than the prior year, with earnings per share beating forecasts in the fourth quarter.
“We have confidence that our competitive strengths and our ability to continue to evolve to stay ahead of the customer positions us to succeed in any economic environment,” Borden said.
…But the big, bangin’ expansion continues
McDonald’s made a splash at the end of last year when it announced a massive global expansion. The chain plans to add about 10,000 restaurants by 2027, with about one third located in China, its fastest growing market.
The company said Monday that it plans to launch 2,100 of those new restaurants in 2024, with nearly half in China alone. That’s on top of the more than 1,000 locations it already opened in the country in 2023.
Why McDonald’s matters for Americans
Fast food, like the auto industry, is a behemoth of the American economy, contributing up to $108 billion to US GDP every year. McDonald’s is the sector’s giant, worth 70 times more than Wendy’s and about six times the company (Yum! Brands) that owns both Taco Bell and KFC.
Despite economic pressures, the company has forged ahead with its plans to get bigger and better. In addition to the expansion, it launched a new drive-thru-only, smaller slushie-and-snack-focused spinoff called CosMc’s last year. That venture received mixed reviews, but it managed to attract customers from far and wide—much more so than the average McDonald’s.