McDonald’s sales slump amid economic headwinds
McDonald’s same-store sales fell 1% globally last quarter. | Photo courtesy of McDonald’s.
A tough economic environment took a bite out of McDonald’s sales last quarter despite the company’s intense focus on value.
Same-store sales declined 3.6% in the U.S. in the first quarter ended March 31, the company said on Thursday. The weak performances was, “primarily driven by negative comparable guest counts.”
Globally, same-store sales declined 1%. Same-store sales declined 1% in the company’s more developed markets like the U.K. and Australia. They rose 3.5% in developing markets, thanks largely to rebounding performance in the Middle East and strength in Japan.
Revenue declined 3% to just under $6 billion. Net income also fell 3% to $1.9 billion, or $2.60 per share. The results fell below Wall Street expectations, according to the website Earnings Whispers.
Weak sales results have been commonplace throughout the restaurant industry, in part because of bad weather in places like California and the Southeast. In addition, there was one less day last quarter than a year ago because the prior year had a Leap Day.
Yet a parade of restaurant chains, including giants Starbucks, Chipotle, Domino’s and Pizza Hut, have reported weak sales that fell below expectations. Several executives cited a challenging economic environment, particularly among low-income consumers hit by years of inflation and now tariff-driven economic uncertainty.
“Consumers today are grappling with uncertainty,” McDonald’s CEO Chris Kempczinski said in a statement.
For McDonald’s, however, the results followed weakening sales late last year after an E. coli outbreak in Colorado and several other Western states. They also come during a period in which the chain introduced a permanent value menu, called McValue, with a combination of local, national and digital offers.
The value menu was designed to attract customers, but has yet to resonate enough to offset inflationary concerns that have hit much of the fast-food world for the past two years.
McDonald’s does have some hope of improvement. The foot traffic tracking firm Placer.ai has said the company’s Minecraft Movie Meal and companion Happy Meal—introduced in April, after the first quarter ended—has generated strong traffic. The company also has high hopes for McCrispy chicken strips, set to appear on the chain’s menus next week.
Notably, McDonald’s did not change its earnings expectations for 2025 despite the lower-than-expected sales results.
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