From CNBC: 2025-01-28 07:00:01

coli outbreak to limit U.S. systemwide same-store sales to flat to down 1% versus our prior forecast of up 2%,” Cowen analyst Andrew Charles wrote in a Thursday note.

McDonald’s executives haven’t commented on the outbreak or its potential financial impact ahead of the company’s earnings report on Feb. 10.

Overall, the restaurant industry is anticipating improving demand for dining out as several companies prepare to report their quarterly earnings. Preliminary results from some restaurants like Red Robin and Noodles & Company show sales trends improving during the fourth quarter, boosting investor confidence. However, Shake Shack disappointed shareholders with its outlook.

Industry data suggests that the fourth quarter of 2024 was better for restaurants overall, with same-store sales growing in October and November. Despite a slight dip in December attributed to a calendar shift, restaurants are optimistic about consumer resilience and spending in 2025.

Casual dining chains like Chili’s, Red Robin, and California Pizza Kitchen have seen improvements in the fourth quarter. Strategies like revamped menus, loyalty programs, and promotions have helped these chains compete and win over customers, indicating positive momentum for the industry.

Starbucks is still in turnaround mode under new leadership, while McDonald’s faced challenges in the fourth quarter due to a foodborne illness crisis. Wall Street expects Starbucks to report a decline in quarterly same-store sales, while McDonald’s is anticipated to report flat to down 1% in same-store sales due to the E. coli outbreak. In the fourth quarter of 2025, US same-store sales were likely impacted by a coli outbreak, leading to a decline in sales trends in November. However, franchisee discussions and traffic trends indicate a recovery in guest counts by December, according to UBS analyst Dennis Geiger.

Restaurant executives are looking optimistically towards 2025, citing improving consumer sentiment and wage growth. While some chains are lagging behind, the industry is expected to see growth this year due to easier comparisons to last year’s sales slump.

Despite industry optimism, challenges lie ahead for restaurants in 2025. Wildfires in Los Angeles, seasonal snowstorms, and frigid temperatures have impacted sales. Executives will need to closely monitor traffic and sales in the first quarter to navigate potential obstacles on the road to recovery.



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