10:21 AM EDT, 10/29/2024 (MT Newswires) -- McDonald's (MCD) reported higher-than-expected third-quarter earnings and revenue on Tuesday, while same-store sales declined more than Wall Street's expectations amid weak traffic trends.

The fast-food heavyweight's adjusted earnings grew to $3.23 per share for the September quarter from $3.19 the year before, ahead of the Capital IQ-polled consensus of $3.20. Revenue moved 3% higher to $6.87 billion, topping the Street's view for $6.82 billion.

Comparable sales on a global basis fell 1.5%, compared with an 8.8% gain in the prior-year quarter. Analysts on Capital IQ estimated the metric to decrease by 0.5%.

"On our last call, we shared the (quick-service restaurant) sector had meaningfully slowed in many of our markets with industry traffic declines in several major markets and that consumers, especially those in the low-income category, were choosing to eat at home more often," Chief Executive Chris Kempczinski said during an earnings call, according to a Capital IQ transcript. This trend continued in the third quarter as traffic "remained pressured, reflecting industry-wide challenges," Kempczinski said.

In the US, same-store sales growth slowed down to 0.3% from 8.1% last year, with average check gains partially offset by "slightly" negative comparable guest counts, according to the company. Comparable sales in international operated markets fell 2.1%, driven by France and the UK.

Same-store sales in international developmental licensed markets dropped 3.5%, as the continued impact of the Middle East war and declines in China more than offset gains in Latin America.

On Sunday, the company announced the planned return of its Quarter Pounder hamburgers in all restaurants this week, after ruling out beef patties as the potential source of a recent E. coli outbreak. Last week, the Centers for Disease Control and Prevention and the US Food and Drug Administration said the number of E. coli cases potentially linked to Quarter Pounder had reached 75 across 13 states, forcing the fast food chain to temporarily remove the item from restaurants in impacted areas.

"We understand from health authorities that slivered onions from Taylor Farms Colorado Springs facility are the likely source of contamination," Kempczinski said on the call. "McDonald's has stopped sourcing onions from this facility indefinitely."

The outbreak didn't impact the group's results for the third quarter, according to Kempczinski. The company reiterated its full-year financial outlook, apart from its interest expense, assuming the incident will not have a material impact to its business, Chief Financial Officer Ian Borden told analysts.

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