World News | McDonald's Value Meals Turn Around US Sales in Third Quarter with Customers Hungry for Deals

Washington, Oct 29 (AP) Value meals helped turn around McDonald's US 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.

US same-store sales — or sales at stores open at least a year — rose 0.3 per cent in the July-September period, the company said Tuesday. McDonald's launched a USD 5 value meal in late June after a disappointing second quarter, and it said the value message resonated with consumers.

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The USD 5 deal was so successful that McDonald's recently extended it to December at most of its US stores.

But last week, a crisis hit.

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McDonald's pulled Quarter Pounders off the menu at 900 stores after the US 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 and expects to put the Quarter Pounder — without onions — back on all of its US menus soon. But it's not yet clear how much the recall hurt demand.

McDonald's also struggled outside the US 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 per cent companywide during the third quarter. That was worse than the 0.6 per cent decline Wall Street was predicting, according to analysts polled by FactSet.

McDonald's revenue rose 3 per cent to USD 6.87 billion for the quarter. That was slightly higher than the USD 6.82 billion analysts were predicting.

McDonald's net income fell 3 per cent to USD 2.25 billion. Adjusted for one-time items, including the costs associated with acquiring McDonald's business in Israel, the company earned USD 3.23 per share, which was higher than the USD 3.21 per share Wall Street was expecting.

Shares of McDonald's Corp were flat before the opening bell Tuesday. (AP)

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)