The logo of McDonald’s (MCD) can be spotted in sunny Los Angeles, California. So, like, McDonald’s had a bit of a rollercoaster ride in its recent quarterly results. The U.S. same-store sales took a nosedive for the second time in a row, showing the biggest drop since the whole Covid situation started. The sales shrunk by a whopping 3.6% because of some bad weather and people being all cautious and stuff. This is the worst drop in the U.S. market since the 8.7% freefall back in 2020 when everything shut down because of Covid.
Analysts were all like, “Yeah, we were totally expecting McDonald’s to report a decline in same-store sales, but more like 1.7%, not this much.” The CEO, Chris Kempczinski, mentioned on a call that the traffic at quick-service restaurants from low-income folks was down by almost double digits compared to last year. And get this, even the middle-income peeps were not showing up as much. It’s like everyone is feeling the economic squeeze, you know?
McDonald’s has a lot of customers from lower and middle-income brackets, unlike some other fancy places. Even though the rich folks are still dining out, their spending is not making up for the drop in traffic from other income groups. So, yeah, tough times all around.
Overall, McDonald’s same-store sales fell by 1% across all its markets during the quarter, mainly because last year had an extra day in February. Like, who knew leap day could mess things up like that, right?
The company’s shares took a little dip, around 1.5%, in the morning trading. But hey, it’s not all bad news. The earnings per share were $2.67, slightly higher than the expected $2.66. Revenue came in at $5.96 billion, a bit shy of the $6.09 billion estimate.
In the first quarter, McDonald’s net income was $1.87 billion, or $2.60 per share, down from the previous year. But if you take out some fancy charges and stuff, they actually earned $2.67 per share. Net sales went down by 3% to $5.96 billion. CFO Ian Borden had said earlier that the first quarter might not be great for same-store sales, especially with a slow start in the U.S. Plus, there’s all this talk about tariffs and prices going up, making people think twice about spending money.
But hey, McDonald’s is not one to back down. They’re rolling out value meals and some cool menu items, like bringing back snack wraps, to lure customers back. And guess what? It seems to be working! The new McCrispy Chicken Strips are a hit, even before they started advertising them. And those tie-in meals with Minecraft for the movie release? Sold out in two weeks! Not too shabby, right?
McDonald’s is keeping its $5 meal deal for the rest of 2025, so that’s something to look forward to. Outside the U.S., same-store sales dropped by 1% in international markets like Australia and France. But hey, that was still better than what analysts had predicted.
The company’s international division saw a 3.5% growth in same-store sales, beating expectations. So, it’s not all doom and gloom internationally. McDonald’s is sticking to its full-year plan, opening new locations and spending a good chunk of change on capital stuff. They’re hoping the new restaurants will boost sales by more than 2%.
So, yeah, McDonald’s had a bit of a rough patch with those U.S. sales, but they’re bouncing back with some cool menu items and international growth. Who knows, maybe they’ll come out stronger in the end.
