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After a year of dominating U.S. headlines for everything from a major E. coli outbreak to a visit from Donald Trump, McDonalds today announced its fourth-quarter and full-year 2024 financial report. Here’s a quick look at the numbers: Fourth-quarter revenue was $6.4 billion Fourth-quarter net income was $2.2 billion Full-year revenue was $25.9 billion Full-year net income was $8.2 billion Global comparable sales increased by 0.4% in the fourth quarter, while U.S. comparable sales dropped by 1.4% in the same period. (Thats compared to a 4.3% gain in the fourth quarter last year.) The data shows that while McDonalds has made progress globally, U.S. numbers remain sluggish as the chain struggles to strike the right balance between fair prices and profit. The $5 meal deal: A financial mixed bag Over the past several months, McDonalds has been on a mission to dispel its reputation as a villain of the American inflation story. In a LendingTree survey last May, 65% of respondents said theyd been shocked by a fast food bill in the past six months, while 80% said they considered fast food to be a luxury. Plenty of ire has been directed at McDonalds for its perceived role in contributing to unaffordable fast food costs. To combat that perception and win customers back, McDonalds launched a $5 value meal in June. While the deal was meant to be a limited-time offering, the campaigns popularity (and financial payoff; its been credited for saving the chains third quarter) led McDonalds to extend the $5 meal into December 2024. Then, in November, McDonalds once again promised to offer its value meal for at least the first half of 2025. On an earnings call today, a McDonalds spokesperson shared that Q4 was the companys best quarter of the year with the American low-income consumer segment. However, per the financial report, the 1.4% drop in U.S. comparable sales could be attributed to a decline in average check, partly offset by slightly positive comparable guest countsmeaning that, as customers are spending less per meal, McDonalds is having trouble recouping the difference. The impact of the E. coli outbreak continues Theres another reason for McDonalds lackluster fourth quarter in the U.S., according to CEO Chris Kempczinski: the lasting impact of last years E. coli outbreak, which sent the companys stock into a tailspin at the time. Our fourth-quarter performance reflects the impact of the food incident, Kempczinski said during todays earnings call. The outbreak, which emerged in late October, sickened dozens of McDonalds customers and killed one person, causing the company to temporarily remove its Quarter Pounder from thousands of stores. Months later, it seems like the company is still working to regain consumers trust as it continues to navigate a rocky economic climate. Nevertheless, investors are relatively optimistic about the companys outlook: As of this writing, shares of McDonald’s (NYSE: MCD) are up almost 5%, to about $309 per share.
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E-Commerce
Shortly after he was confirmed as President Donald Trumps transportation secretary, Sean Duffy circulated a memo that instructed his department to prioritize families by, among other things, giving preference to communities with marriage and birth rates higher than the national average when awarding grants. Connecticut Democratic Sen. Richard Blumenthal called the directive last week deeply frightening,” and Washington Democratic Sen. Patty Murray called it disturbingly dystopian. The memo also calls for prohibiting governments that get Department of Transportation funds from imposing vaccine and mask mandates and requiring their cooperation with the administrations immigration enforcement efforts. With hundreds of billions of dollars in transportation money still unspent from the 2021 Bipartisan Infrastructure Law, such changes could be a boon for projects in Republican-majority states, which on average have higher fertility rates than those leaning Democratic. States controlled by Democrats were generally more receptive to mask and vaccine rules to combat the COVID-19 pandemic and have been more resistant to Trumps immigration raids. More births for more roads? All administrations set their own rules for choosing which transportation projects to prioritize. But some of Duffy’s directives were received as highly unusual. Distributing transportation funding based marriage and birth rates is bizarre and a little creepy,” said Kevin DeGood, senior director of infrastructure and housing policy at the left-leaning Center for American Progress. “States and regions with aging populations tend, on average, to have lower birth rates … Are they somehow not deserving of transportation investment? According to the latest figures from the Centers for Disease Control and Prevention in 2022, the 14 states with the highest fertility rates backed Trump in the November election while the bottom 11 plus the District of Columbia supported Democrat Kamala Harris. Marriage rates tend to skew higher for red states too, but by a smaller margin. Vice President JD Vance has long expressed concern about declining birth rates, citing national economic needs as well as the inherent value of children. Tennessee Republican Sen. Marsha Blackburn raised the idea of tying transportation funding to population growth during Duffys confirmation hearing. People are leaving some of these blue states and coming to places like Tennessee, she said. And this means that we need to look at where those federal highway dollars are spent and placing them in areas with growing needs rather than areas that are losing population. Sarah Hayford, sociology professor and director of the Institute for Population Research at Ohio State University, said she had never heard of birth rates being used to set funding priorities. I was a little surprised,” she said. “Often the policy around birth rates is trying to address challenges or barriers to people not having children. This seems more focused on rewarding people for already having children. The U.S. birth rate has been declining since 2007, which Hayford attributes in part to economic uncertainty during the Great Recession. She said research has tied higher birth rates to areas with lower education. Longstanding transportation policy already considers where kids live, said Beth Jarosz, senior program director at the nonpartisan and nonprofit Population Reference Bureau. If what youre trying to do is support families, birth rates arent necessarily the best way to do that, she said, pointing out that many growing families move to new communities when they find their homes are too small. The Department of Transportation has not responded to questions about the memo. So far, lawmakers and advocates are unaware of birth and marriage rates being linked to non-transportation grants. Blue states push back Blumenthal said the transportation secretary’s focus on birth and marriage rates was “reminiscent of what you might see in the Peoples Republic of China. On its face, its social engineering. But clearly and indisputably, it is a dagger aimed at blue states, he said. It is patently discriminatory if you look at the numbers. This criteria was designed to punish blue states and coerce states to change their lawful policy on tolls, vaccines and immigration. U.S. Rep. Kweisi Mfume, a Maryland Democrat, said he feared Duffy’s directives would harm some grants already announcedincluding $85 million awarded to Baltimore in the final weeks of the Biden administration to transform a blighted stretch of U.S. 40 known as the highway to nowhere. If it’s an effort to reward red states, he ought to just go ahead and say that, Mfume said. Otherwise, there will be a lot of challenges by states and advocacy organizations all over the country who have no choice but to fight back, and that fight will become a legal one. Yet Jarosz said the policy’s political intentions are unclear, noting communities like San Diego and Sacramento in California are above the national average in terms of birth rates, while certain rural areas of the country are below. Is this even legal? Legal experts say it is too early to know whether anything in Duffy’s memo could be struck down by the courts. Although it is difficult to make a legal argument for funding equality based on political affiliation, federal law does protect against discrimination over such things as race, sex, and disabilities. Joel Roberson, who handles transportation and infrastructure cases at the Washington, D.C., law firm Holland & Knight, said administrations have widespread authority to set their own criteria for awarding money. However, communities denied funding could file a lawsuit arguing they endured an illegal disparate impact. As for whether Trump could redirect transportation grants awarded under Biden, Roberson said it largely depends on the status of the project and whether Congress has already appropriated the funding. State transportation officials have expressed confidence that changes in priorities won’t impact the federal funds states use to set their own transportation priorities and build roads. But many other grants are awarded at the discretion of the administration in power. Less clear is the status of some already approved discretionary grants, such as an agreement signed just before former President Joe Biden left office committing $1.9 billion toward a nearly $5.7 billion project to add four new L stations in South Side Chicago. Blumenthal, a former state attorney general and federal prosecutor, said Duffy’s edict created uncertainty and confusion” and pointed out it doesn’t carry any legal weigt like statutes and regulations do. He predicted courts would ultimately reject the policy. Anybody can write a memo, Blumenthal said. Jeff McMurray and Susan Haigh, Associated Press
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E-Commerce
A single wind turbine spinning off the U.S. Northeast coast today can power thousands of homeswithout the pollution that comes from fossil fuel power plants. A dozen of those turbines together can produce enough electricity for an entire community. The opportunity to tap into such a powerful source of locally produced clean energyand the jobs and economic growth that come with it is why states from Maine to Virginia have invested in building a U.S. offshore wind industry. But much of that progress may now be at a standstill. One of Donald Trumps first acts as president in January 2025 was to order a freeze on both leasing federal areas for new offshore wind projects and issuing federal permits for projects that are in progress. The order and Trumps long-held antipathy toward wind power is creating massive uncertainty for a renewable energy industry at its nascent stage of development in the U.S., and ceding leadership and offshore wind technology to Europe and China. The U.S. Northeast and Northern California have the nations strongest offshore winds. [Image: NREL] As a professor of energy policy and former undersecretary of energy for Massachusetts, Ive seen the potential for offshore wind power, and what the Northeast states, as well as the U.S. wind industry, stand to lose if that growth is shut down for the next four years. Expectations fall from 30 gigawatts by 2030 The Northeasts coastal states are at the end of the fossil fuel energy pipeline. But they have an abundant local resource that, when built to scale, could provide significant clean energy, jobs and supply chain manufacturing. It could also help the states achieve their ambitious goals to reduce their greenhouse gas emissions and their impact on climate change. The Biden administration set a national offshore wind goal of 30 gigawatts of capacity in 2030 and 110 gigawatts by 2050. It envisioned an industry supporting 77,000 jobs and powering 10 million homes while cutting emissions. As recently as 2021, at least 28 gigawatts of offshore wind power projects were in the development or planning pipeline. With the Trump order, I believe the U.S. will have, optimistically, less than 5 gigawatts in operation by 2030. That level of offshore wind is certainly not enough to create a viable manufacturing supply chain, provide lasting jobs or deliver the clean energy that the grid requires. In comparison, Europes offshore wind capacity in 2023 was 34 gigawatts, up from 5 gigawatts in 2012, and Chinas is now at 34 gigawatts. What the states stand to lose Offshore wind is already a proven and operating renewable power source, not an untested technology. Denmark has been receiving power from offshore wind farms since the 1990s. The lost opportunity to the coastal U.S. states is significant in multiple areas. Trumps order adds deep uncertainty in a developing market. Delays are likely to raise project costs for both future and existing projects, which face an environment of volatile interest rates and tariffs that can raise turbine component costs. It is energy consumers who ultimately pay through their utility bills when resource costs rise. The potential losses to states can run deeper. The energy company rsted estimated in early 2024 that its proposed Starboard Offshore Wind project would bring Connecticut nearly US$420 million in direct investment and spending, along with employment equivalent to 800 full-time positions and improved energy system reliability. Massachusetts created an Offshore Wind Energy Investment Trust Fund to support redevelopment projects, including corporate tax credits up to $35 million. A company planning to build a high-voltage cable manufacturing facility there pulled out in January 2025 over the shift in support for offshore wind power. On top of that, power grid upgrades to bring offshore wind energy inlandcritical to reliability for reducing greenhouse gas emissions from electricity will be deferred. Atlantic Coast wind-energy leases as of July 2024. Others ind energy lease areas are in the Gulf of Mexico, off the Pacific coast and off Hawaii. [Image: U.S. Bureau of Safety and Environmental Enforcement] Technology innovation in offshore wind will also likely move abroad, as Maine experienced in 2013 after the states Republican governor tried to void a contract with Statoil. The Norwegian company, now known as Equinor, shifted its plans for the worlds first commercial-scale floating wind farm from Maine to Scotland and Scandinavia. Sand in the gears of a complex process Development of energy projects, whether fossil or renewable, is extremely complex, involving multiple actors in the public and private spheres. Uncertainty anywhere along the regulatory chain raises costs. In the U.S., jurisdiction over energy projects often involves both state and federal decision-makers that interact in a complex dance of permitting, studies, legal regulations, community engagement and finance. At each stage in this process, a critical set of decisions determines whether projects will move forward. The federal government, through the Department of Interiors Bureau of Offshore Energy Management, plays an initial role in identifying, auctioning and permitting the offshore wind areas located in federal waters. States then issue requests for proposals from companies wishing to sell wind power to the grid. Developers who win bureau auctions are eligible to respond. But these agreements are only the beginning. Developers need approval for site, design and construction plans, and several state and federal environmental and regulatory permits are required before the project can begin construction. Trump targeted these critical points in the chain with his indefinite but temporary withdrawal of any offshore wind tracts for new leases and a review of any permits still required from federal agencies. Jobs and opportunity delayed A thriving offshore wind industry has the potential to bring jobs, as well as energy and economic growth. In addition to short-term construction, estimates for supply chain jobs range from 12,300 to 49,000 workers annually for subassemblies, parts and materials. The industry needs cables and steel, as well as the turbine parts and blades. It requires jobs in shipping and the movement of cargo. To deliver offshore wind power to the onshore grid will also require grid upgrades, which in turn would improve reliability and promote the growth of other technologies, including batteries. Taken all together, an offshore wind energy transition would build over time. Costs would come down as domestic manufacturing took hold, and clean power would grow. While environmental goals drove initial investments in clean energy, the positive benefits of jobs, technology and infrastructure all became important drivers of offshore wind for the states. Tax incentives, including from the Inflation Reduction Act, now in doubt, have supported the initial financing for projects and helped to lower costs. Its a long-term investment, but once clear of the regulatory processes, with infrastructure built out and manufacturing in place, the U.S. offshore wind industry would be able to grow more price competitive over time, and states would be able to meet their long-term goals. The Trump order creates uncertainty, delays and likely higher costs in the future. Barbara Kates-Garnick is a professor of practice in energy policy at The Fletcher School at Tufts University. This article is republished from The Conversation under a Creative Commons license. Read the original article.
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E-Commerce
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