McDonald’s Global Sales and Earnings Drop, Weighed Down by Weak US Sales

May 1, 2025 TruthUSA

The company’s first-quarter U.S. sales declined by 3.6 percent year over year, compared to a 1 percent global decline.

McDonald’s Co.’s first-quarter sales declined due to weaknesses in its home market, as competition in the quick-service industry has heated up.

On May 1, the Chicago-based fast-food franchise giant reported a 1 percent decline in global comparable sales, led by a 3.6 percent decline in U.S. sales.

Consolidated revenues and operating income declined by 3 percent each, with earnings per share coming in at $2.67, a 1 percent drop from a year ago.

In the United States, overall industry traffic in the quick-service restaurant sector from low- and middle-income consumers was down by nearly double digits from the same quarter in 2024, while traffic from high-income consumers continued to grow steadily, McDonald’s Chairman and CEO Chris Kempczinski said during an earnings call.

This shows “a divided U.S. economy where low- and middle-income consumers are being weighted down by the cumulative impact of inflation and heightened anxiety about the economic outlook,” he said.

A Placer.ai survey further supports the weakness in the fast-food chain’s U.S. sales, showing that store visits dropped 2.6 percent in the first quarter from the same period a year earlier.

Kempczinski attempted to put a positive spin on the company’s lackluster financial results, pointing to its long history of “innovation” and agility.

“McDonald’s has a 70-year legacy of innovation, leadership, and proven agility—all of which give us confidence in our ability to navigate even the toughest of market conditions and gain market share,” he said.

At the same time, he joined the leaders of competing fast-food franchises in blaming a challenging U.S. consumer environment.

“Consumers today are grappling with uncertainty, but they can always count on McDonald’s for exciting new menu items and delicious favorites for exceptional value from a brand they love,” he said.

Patrizia Porrini, a professor of management at Long Island University, had a mixed response to the food giant’s first-quarter financial results.

“Although McDonald’s earnings barely missed estimates, revenue declined,” she told The Epoch Times via email. “This is not surprising, given consumers’ increased spending sensitivity, the trending and pervasive shifts toward healthier food consumption, and the difficulty in finding ‘value’ in its value meal.”

While the claim of “consumer uncertainty” is supported by several consumer sentiment surveys published by the University of Michigan and The Conference Board, it isn’t consistent with actual data on consumer spending.

For instance, the first-quarter GDP data, released yesterday, showed that consumer spending continues to grow, although at a slower pace. In addition, retail sales rose by 4.6 percent in March, following a 3.5 percent rise in February and 4.2 percent in January.

The disconnect between what consumers say and what they do points to another explanation about the lackluster sales of quick service restaurants: the growing competition and market saturation that may end up “cannibalizing” sales across brands while limiting their pricing power.

For instance, McDonald’s has opened or refurbished 920 locations over the past five years, Chipotle has more than 1,000, and Yum Brands has been opening new restaurants exponentially over the same period.

The possibility that growing competition is taking its toll on the nation’s fast-food franchises is supported by another Placer.ai survey, which showed that visits to brick-and-mortar retail and dining chains declined slightly in the first quarter from the fourth quarter of 2024.

“The year-over-year (YoY) visit gaps widened to 0.5 percent for retail while dining visits dropped 1.4 percent below first-quarter 2024 levels,” Shira Petrack of Placer.ai said.

“And while some of the dip may be due to Q1 2025 having one day less than 2024’s longer February, the decline could also signal a softening of consumer sentiment.”

Porrini is skeptical about McDonald’s prospects for regaining its old glory days of fast growth.

“Brand-wise, it is a Goliath; however, that may very well be its Achilles’ heel, facing competition from the growing appreciation for simpler foods,” she said.

“McDonald’s brand recognition will pull it through and keep it growing, but it has and will face a real struggle: encouraging consumers to return for value after leaving with pricey meals.”

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