McDonald’s (MCD) Q1 2025 earnings

McDonald’s on Thursday reported blended quarterly outcomes as its U.S. same-store gross sales fell for the second straight quarter, posting their largest home decline for the reason that onset of the Covid pandemic.

McDonald’s U.S. same-store gross sales shrank 3.6% because the chain confronted dangerous climate and a extra cautious shopper. That drop is the worst in McDonald’s residence market for the reason that 8.7% plunge in the course of the second quarter of 2020, when states imposed lockdowns to gradual the unfold of Covid.

Analysts surveyed by StreetAccount have been anticipating the corporate to report home same-store gross sales declines of 1.7% for the primary quarter.

“Within the U.S., general [quick-service restaurant] trade site visitors from the low-income shopper cohort was down practically double digits versus the prior 12 months quarter,” CEO Chris Kempczinski mentioned on the corporate’s convention name. “In contrast to a couple of months in the past, QSR site visitors from middle-income shoppers fell practically as a lot, a transparent indication that the financial strain on site visitors has broadened.”

In contrast with its trade friends, McDonald’s has extra low- and middle-income diners, executives mentioned. And although high-income shoppers are nonetheless eating out, their spending isn’t sufficient to offset the shrinking site visitors from different earnings cohorts.

Throughout all of its markets, McDonald’s same-store gross sales fell 1% in the course of the quarter, harm by comparisons to final 12 months’s leap day, the corporate mentioned.

Shares of the corporate fell roughly 1.5% in morning buying and selling.

This is what the firm reported for the primary quarter in contrast with what Wall Road was anticipating, primarily based on a survey of analysts by LSEG:

• Earnings per share: $2.67 adjusted vs. $2.66 anticipated
• Income: $5.96 billion vs. $6.09 billion anticipated

The fast-food large reported first-quarter web earnings of $1.87 billion, or $2.60 per share, down from $1.93 billion, or $2.66 per share, a 12 months earlier.

Excluding restructuring prices and different gadgets, McDonald’s earned $2.67 per share.

Internet gross sales dropped 3% to $5.96 billion.

Again in February, CFO Ian Borden mentioned he anticipated the primary quarter to be the low level for McDonald’s same-store gross sales, partly attributable to a weak begin to the 12 months within the U.S. Since then, President Donald Trump has launched broad tariffs, heightening pricing considerations for some shoppers.

For its half, McDonald’s has already mentioned it plans to lean into worth meals and buzzy menu gadgets, just like the return of its snack wraps, to deliver diners again to its eating places this 12 months.

A month into the second quarter, the technique appears like it’s working. New McCrispy Hen Strips have been promoting effectively even earlier than the chain has begun promoting the menu merchandise. Plus, tie-in meals with online game franchise Minecraft, timed for the discharge of the blockbuster film, bought out of collectibles in roughly two weeks, in keeping with Kempczinski.

McDonald’s additionally plans to maintain its $5 meal deal for the remainder of 2025.

Outdoors the U.S., McDonald’s noticed same-store gross sales fall 1% in its worldwide operated markets, which embody Australia and France. The section contains McDonald’s largest worldwide markets and accounts for roughly half of its income. Analysts had projected flat same-store gross sales within the section for the quarter.

“In most of our main markets, we’re seeing an identical story regarding the difficult trade setting and softening shopper sentiment,” Borden mentioned on the corporate’s earnings name.

The corporate’s worldwide developmental licensed markets division reported same-store gross sales development of three.5%, narrowly beating analyst estimates of three.2%. That section contains Japan, China and Brazil.

McDonald’s on Thursday reiterated its full-year outlook, together with plans to open 2,200 places and to spend between $3 billion and $3.2 billion on capital expenditures, it mentioned in a regulatory submitting. The corporate is projecting that web restaurant openings will enhance its systemwide gross sales development by barely greater than 2%.

— CNBC’s Robert Hum contributed to this report.