McDonald's (MCD, Financial) shares are up 5% after Q4 results, despite missing EPS and revenue estimates. The stock's rise is attributed to the E. coli outbreak impact being less severe than anticipated. Although MCD missed expectations, the miss was modest, and consumer fear post-outbreak was less prolonged than expected.

• Global comparable sales increased by 0.4%, marking a return to positive figures after negative comps in Q3 (-1.5%) and Q2 (-1.0%). The company faced mixed results across markets, with negative comps in the UK, while only two of its big five markets saw positive QSR industry traffic.
• The International Developmental Licensed (IDL) segment showed strength with a 4.1% increase in comps, driven by positive outcomes in the Middle East and Japan. McDonald's is witnessing stabilization in China, despite the ongoing impact of the October 2023 war in the Middle East.
• US comps fell by 1.4% in Q4, down from a 0.3% increase in Q3. Despite the E. coli outbreak, investors are reassured by the sequential improvement since early November. McDonald's expects to fully recover from the outbreak by Q2 2025.
• Spending pressures continue, especially among low-income families in Europe. In the US, McDonald's introduced the McValue menu, featuring the $5 meal deal and Buy One, Add One for $1 option. The menu, promoted by John Cena, has performed well, with the $5 meal deal driving average checks over $10.

McDonald's stock is gaining for several reasons: the E. coli outbreak impact was less severe than expected, global comps returned to positive, and there are signs of stabilization in China. The company is also enhancing its value offerings to attract consumers, helping to offset spending pressures.