McDonald's To Open 2,200 New Restaurants Amid 'Sluggish Start' To 2025, CEO Hints At Snack Wrap Comeback

McDonald’s Corp. MCD is betting big on global growth despite warning of a “sluggish start” to 2025 announced during its fourth-quarter earnings call on Monday. With plans to open 2,200 new restaurants this year as the fast-food giant works to recover from recent challenges including an E. coli outbreak.

What Happened: The expansion push comes as McDonald’s faces continued pressure from rising menu prices and softening demand, particularly among low-income customers who are “down double digits” in recent months according to CEO Chris Kempczinski.

Recent financial results reflect these pressures, with fourth-quarter sales declining 0.3% year-over-year to $6.39 billion, missing analyst estimates of $6.44 billion.

“Obviously, our performance in 2024 did not meet our expectations,” Kempczinski acknowledged on the company’s earnings call. CFO Ian Borden noted that the first quarter of 2025 will likely be a “low-point quarter” for the company as it grapples with industry-wide traffic declines and the lingering effects of 2024’s food safety incident.

The company is also preparing to bring back fan-favorite Snack Wraps and launch new chicken strips later this year, though executives remained tight-lipped on specific timing. “My U.S. team would kill me if I gave any more details,” Kempczinski joked.

See Also: Traders Rethink Interest-Rate Path As Inflation Concerns Resume: ‘Fed’s Rate-Cutting Cycle Is Over,’ Economist Says

Why It Matters: The chain is fighting back with an aggressive value strategy, including new meal bundles and promotions. Early results show promise – the $5 meal deal is driving average checks above $10 as customers add additional items to their orders.

Of the planned 2,200 new locations, about 1,000 will be in China, with the remainder split between the U.S., other international markets, and developmental licensee regions. The expansion is part of the fast-food giant’s strategy to reach 50,000 locations by 2027.

Price Action: McDonald’s stock surged 4.80% on Monday, gaining $14.12 to close at $308.42. In after-hours trading, the stock edged down 0.21%, according to data from Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.