New York, New York, Thursday, May 1, 2025:- Today McDonald’s reported mixed financial results for the first quarter of 2025, highlighting a significant decline in U.S. same-store sales, marking the largest domestic drop since the onset of the Covid pandemic.
In the U.S. market, McDonald’s same-store sales decreased by 3.6%, considerably surpassing analysts’ expectations of a 1.7% decline, as surveyed by StreetAccount. This reduction represents the company’s steepest domestic sales downturn since the second quarter of 2020, during the Covid-related lockdowns, when sales plummeted by 8.7%. The company attributed this performance to adverse weather conditions and increasingly cautious consumer spending.
CEO Chris Kempczinski explained during the earnings call that quick-service restaurant (QSR) traffic, particularly from low-income consumers, experienced nearly double-digit declines compared to the same period last year. He noted a notable shift among middle-income consumers as well, suggesting broadening economic pressures affecting consumer spending patterns. McDonald’s customer demographic leans significantly toward low and middle-income groups, and despite continued patronage from high-income customers, their spending was insufficient to counterbalance overall reduced foot traffic.
Globally, McDonald’s same-store sales decreased by 1% during the quarter, influenced partly by an unfavorable comparison to last year’s leap day. Consequently, shares fell approximately 1.5% in morning trading following the announcement.
Key financial results for McDonald’s first quarter, compared to Wall Street expectations as surveyed by LSEG, include:
- Adjusted Earnings per Share: $2.67, slightly above the expected $2.66.
- Revenue: $5.96 billion, below the forecasted $6.09 billion.
Net income for the quarter was reported at $1.87 billion, or $2.60 per share, down from the previous year’s $1.93 billion or $2.66 per share. Excluding restructuring charges and other specific items, adjusted earnings were $2.67 per share. Overall, net sales declined by 3%.
CFO Ian Borden earlier predicted that the first quarter would be a low point for McDonald’s sales, referencing a weak U.S. market start compounded by consumer concerns following recent tariff announcements by former President Donald Trump.
To reverse this trend, McDonald’s plans to emphasize value-driven strategies and popular menu items. Early indications in the second quarter suggest a positive response from customers, particularly towards new offerings such as McCrispy Chicken Strips, which have garnered strong sales even without substantial marketing support. Additionally, promotional tie-ins, such as the partnership with the Minecraft video game franchise, have demonstrated substantial consumer interest, rapidly selling out collectible items.
The company has committed to maintaining its $5 meal deal through the end of 2025 to attract budget-conscious consumers.
Internationally, McDonald’s faced similar challenges. The international operated markets segment, including significant markets such as Australia and France, saw a 1% decline in same-store sales, falling short of analyst predictions for a flat quarter. Borden indicated this was reflective of broader industry pressures and declining consumer confidence.
However, McDonald’s international developmental licensed markets, comprising countries such as Japan, China, and Brazil, delivered a 3.5% increase in same-store sales, surpassing analyst estimates of 3.2%.
McDonald’s reaffirmed its full-year financial outlook, maintaining its projection to open approximately 2,200 new locations and allocate between $3 billion and $3.2 billion toward capital expenditures. These new openings are expected to enhance systemwide sales growth by slightly more than 2% for the year.
