McDonald’s store traffic fell unexpectedly in the first quarter as economic uncertainty weighed on diners.
The burger giant’s same-store sales, or sales at locations open at least a year, fell one per cent globally in the January-March period. Without the impact of the extra leap year day in 2024, same-store sales were flat, the company said.
Wall Street had been expecting an increase of nearly two per cent, according to analysts polled by FactSet.
The trouble was particularly acute in the U.S., where same-store sales slumped 3.6 per cent. That was the biggest U.S. decline McDonald’s has seen since 2020, when a pandemic shuttered stores and restaurants and other public spaces nationwide.
Flagging consumer confidence is hurting U.S. demand at McDonald’s and other restaurant chains. Last week, rival Chipotle also reported weaker-than-expected same-store sales in the first quarter.
Chipotle CEO Scott Boatwright said concern about the economy was the “overwhelming reason” consumers dined out less often.
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McDonald’s has responded by expanding its U.S. value menu, which lets customers buy one item for $1 when they buy a full-priced item. It’s also offering its $5 Meal Deal through this summer. That deal was introduced last June and extended several times.
Revenue at the Chicago chain fell three per cent to $5.95 billion, short of analysts’ forecast of $6.09 billion, according to FactSet.
Net income fell three per cent to $1.86 billion. Adjusted for restructuring charges and other one-time items, the company earned $2.67 per share, beating Wall Street projections by a penny.
Shares of McDonald’s Corp. fell just over two per cent at the opening bell Thursday.
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