Most of McDonald’s Corp. (NYSE:MCD) US restaurants will extend the $5 meal deal to attract budget-strapped customers, Bloomberg News reported on Monday.
According to a memo seen by the news outlet, about 93% of McDonald’s locations will continue offering the deal beyond the initial four-week period that began on June 25. The extension periods will vary, with some locations planning to offer it through August.
Early results suggest that the meal deal “is meeting the objective of driving guests back to our restaurants,” the report states, citing a message from Tariq Hassan, chief marketing officer, and Myra Doria, national field president.
“Driving guest counts ultimately propels our business and is the key to sustained growth,” they added.
The memo also revealed that McDonald’s aims to strengthen its “affordability plans through the rest of the year,” potentially extending the current meal deal even further. Moreover, the company is considering longer operating hours to meet demand during off-peak times.
McDonald’s seeks to attract US consumers who have reduced their spending as disposable incomes decline. Many customers have cut back following the chain’s price increases in recent years.
McDonald’s is set to report its second-quarter earnings on July 29.
Analysts expect that McDonald’s will report a profit of $3.10 per share, marking a slight decline of 2.2% from $3.17 per share in the same quarter last year. The fast food giant has exceeded Wall Street’s earnings expectations in three of the past four quarters, with one miss.
In the most recent quarter, McDonald’s reported an EPS of $2.70, a 2% year-over-year increase, but fell short of the consensus estimate due to the impact of budget-conscious consumers.
For fiscal 2024, analysts forecast McDonald’s to report an EPS of $12.17, a 1.9% increase from $11.94 in fiscal 2023. Looking ahead to fiscal 2025, EPS is projected to grow by 8.2% annually, reaching $13.17.