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McDonald's (MCD.N) missed Wall Street estimates for growth in quarterly U.S. comparable sales on Thursday, as low-priced meal deals and limited-time offers failed to draw diners whose budgets have been strained by higher fuel and grocery costs.
After several years of price hikes, operators in the fast-food industry have been forced to rely more on value-driven promotions to revive demand as customers cut back spending.
The world's biggest burger chain posted U.S. same‑store sales growth of 3.9% in the first quarter, missing expectations of a 4.2% increase, according to data compiled by LSEG.
The slowdown at McDonald's reflects a wider industry trend.
Several U.S. restaurant chains such as Wingstop (WING.O) and Domino's (DPZ.O) have reported weaker quarterly sales growth, citing a hit to customer spending from soaring gasoline prices caused by the Iran war.
Lower-income consumers are becoming more selective, Wall Street analysts have said, increasingly trading down to simpler, single‑item orders rather than full meals.
McDonald's U.S. traffic remained uneven through the first quarter, data from Placer.ai showed.
Same-store visits fell 1.3% in January due to winter storms. Traffic rebounded 3.8% in February on pent‑up demand, but slipped in March to 1.2% in a more muted response to new menu launches as rising fuel prices further hurt household budgets.
To capture cost-conscious customers, McDonald's has expanded its McValue platform with new $3 and $4 tiers in April.
Globally, McDonald's comparable sales rose 3.8%, narrowly missing analysts' average expectation of 3.95%, though it was an improvement from a 1% decline a year ago.
Sales in its business segment, where restaurants are operated by local partners, grew 3.4%, led by Japan, while international market sales rose 3.9% on demand in Britain, Germany and Australia.
Net income for the January-March quarter rose 6% to $1.98 billion. On an adjusted basis, McDonald's earned $2.83 per share, up from $2.67 a year earlier.
