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Time of India
5 days ago
- Business
- Time of India
McDonald's global sales top estimates as affordable meal options boost demand
McDonald's second-quarter global comparable sales beat Wall Street estimates on Wednesday, as affordable meal bundles and promotions drew in budget-conscious diners looking to stretch their dollars amid economic uncertainty. Its shares rose 2.3% in early trading as strong demand in the U.S. and international markets powered a 3.8% rise in global same-store sales, above expectations of a 2.4% rise, according to data compiled by LSEG. Fast-food chains have seen competition heat up as companies such as McDonald's, Domino's Pizza and Taco Bell owner Yum Brands double down on value meals to counter a slowdown in demand, mainly among the lower-income households. To improve sales, McDonald's launched a limited-time Happy Meal offer for kids and adults tied to the "Minecraft" Movie promotion in April. In May, it introduced McCrispy Chicken Strips as a permanent menu item. These promotions are in addition to the $5 meal deal and the buy-one, add-one for $1 offers launched last year. CEO Chris Kempczinski said re-engaging the low-income consumer is "critical", as they typically visit its restaurants more frequently than middle- and high-income groups. "This bifurcated consumer base is why we remain cautious about the overall near-term health of the U.S. consumer," he said. Menu innovation and promotions had also helped Domino's report upbeat U.S. same-store sales , while weakening demand hurt sales at Yum Brands and Chipotle Mexican Grill. For the second quarter, customer visits to McDonald's outperformed the wider quick-service restaurant category, data from foot traffic tracking firm showed. "While rivals like Yum Brands and Chipotle struggled with consumer pullback, McDonald's played to its strengths by leaning into value, nostalgia and limited-time promotions," eMarketer analyst Zak Stambor said. Comparable sales in U.S., McDonald's biggest market, grew 2.5%, compared with a 0.7% decline a year ago. Sales in its business segment where restaurants are operated by local partners, jumped 5.6%, led by Japan, while it rose 4% in international markets, on demand recovery in the UK, Canada and France. Adjusted net income of $3.19 per share exceeded estimates of $3.15.
NBC News
6 days ago
- Business
- NBC News
McDonald's sees U.S. sales rebound, but concerns about low-income consumers linger
McDonald's on Wednesday reported quarterly earnings and revenue that topped analysts' expectations as buzzy promotions helped its U.S. restaurants rebound. Despite the chain's improved performance this quarter, executives are still worried about the economic health of the low-income consumer. McDonald's is working with its U.S. franchisees on ways to make its core menu items more affordable, beyond the $5 meal deal it rolled out last summer and the newer Daily Double burger promotion. 'Reengaging the low-income consumer is critical, as they typically visit our restaurants more frequently than middle- and high-income consumers,' CEO Chris Kempczinski told analysts on the company's earnings conference call. 'This bifurcated consumer base is why we remain cautious about the overall near-term health of the U.S. consumer.' Executives said they anticipate that McDonald's results will be stronger in the second half of the year, particularly as the chain faces easier comparisons in the fourth quarter to the fallout from last year's E. coil outbreak. Shares of the company rose more than 2% in morning trading. Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG: Earnings per share: $3.19 adjusted vs. $3.15 expected Revenue: $6.84 billion vs. $6.7 billion expected The fast-food giant reported second-quarter net income of $2.25 billion, or $3.14 per share, up from $2.02 billion, or $2.80 per share, a year earlier. Excluding restructuring charges and other items, McDonald's earned $3.19 per share. Revenue rose 5% to $6.84 billion. Kempczinski in the company's earnings release credited the chain's value, marketing and new menu items for the 6% increase in system sales during the quarter. Same-store sales, a metric that only tracks the performance of restaurants that have been open at least a year, increased 3.8%, the chain's biggest jump in nearly two years. McDonald's U.S. restaurants saw same-store sales growth of 2.5%, reversing two straight quarters of domestic declines. Kempczinski said the burger chain outperformed its rivals by both same-store sales and comparable traffic. 'Certainly, overall [quick-service restaurant] traffic in the U.S. remained challenging, as visits across the industry by low-income consumers once again declined by double digits versus the prior year period,' he said on the call. This quarter, the burger chain's U.S. sales received a boost from a tie-in meal with the 'Minecraft' movie and the launch of the McCrispy Chicken Strips. Shortly after the quarter ended, Snack Wraps returned to menus for the first time in nine years; executives said that early results are 'encouraging,' and franchisees have voted to maintain the $2.99 promotional price through the end of the year. Outside the U.S., demand for its Big Macs and french fries was even stronger. 'I would just note, also on our international side, it's not as competitive a market as it is in the U.S.,' Kempczinski said. 'I think it's a little bit easier for us to stand out and represent good value in international.' The chain's international developmental licensed markets division, which includes Japan and China, reported same-store sales growth of 5.6%. Its international operated markets segment saw same-store sales growth of 4%, thanks to gains in countries like the United Kingdom, Australia and Canada. Executives said McDonald's value and affordability scores from consumers have improved in key markets.
Yahoo
6 days ago
- Business
- Yahoo
McDonald's chicken, loyalty and value end same-store sales slump
This story was originally published on Restaurant Dive. To receive daily news and insights, subscribe to our free daily Restaurant Dive newsletter. Dive Brief: The Golden Arches' same store-sales trouble ended in Q2 2025, according to the chain's most recent earnings release, with the key metric rising by 2.5% in the U.S. McDonald's outperformed its close competitors in guest count and comp sales, CEO Chris Kempczinski said on the chain's Wednesday earnings call, despite continued weakness in overall QSR traffic — particularly among low-income consumers. McDonald's experienced broad-based growth across its core markets, driven by its value offerings and menu innovation, Kempczinski said. CFO Ian Borden said the brand's McCrispy Chicken Strips and Minecraft promotion drove consumer enthusiasm in Q2, while its snack wrap LTO extended the gains in Q3. Dive Insight: The brand's focus on menu innovation helped it kick the sales trouble that began in mid-year 2024, when pullback by low-income consumers pitched sales growth into negative territory for the first time in years. So far in 2025, McDonald's has announced three new leadership teams focused specifically on chicken, beef, dessert and beverage innovation. Dessert innovation may be of particular urgency for the brand, given the end of McDonald's nascent Krispy Kreme partnership. Three recent menu additions have helped the Golden Arches boost sales gains. In July, the chain relaunched its snackwrap LTO after a six-month buzz buildup, helping to kick off renewed chicken competition in the QSR segment. The chain also added the Daily Double cheeseburger to its menu through year's end, anchoring the higher end of its value menu. Then McDonald's added McCrispy Chicken Strips to the permanent menu in May. Later this year, McDonald's will test a slate of premium beverages at more than 500 stores, with the drinks based on lessons learned from the now-shuttered CosMc's drinks concept. Those drinks could help the chain capture traffic that's shifting to afternoon snacking occasions. Combined with the new dishes, McDonald's value platforms and loyalty program have helped improve its market position. Kempczinski said the chain's loyalty users visit the chain 26 times in a year, compared to about 10 visits for non loyalty members. The McValue program, including the $5 Meal Deal, has also driven visits. Together, McValue and loyalty account for 50% of restaurant visits in the U.S., Kempczinski said, with relatively little overlap between the two channels. Kempczinski said McDonald's is looking at its core menu pricing, in concert with franchisees, as it looks to boost frequency among consumers who aren't using its rewards program or its McValue platform. 'Today, too often, if you're that consumer, you're driving up to the restaurant and you're seeing combo meals could be priced over $10,' Kempczinski said. 'That absolutely is shaping value perceptions in a negative way. So we've got to get that fixed.' But Borden said lower-income consumers remain under macroeconomic strain, with visits by that cohort to QSRs overall down by double digits. Middle- and higher-income consumers have increased their visits to fast food, Borden said. Kempczinski said this consumer weakness is due both to expectations about tariff impacts and the longer term impacts of inflation on consumer disposable income. 'Despite improvements in wage gains, real incomes are down. With the low-income consumer, that absolutely is going to put pressure on visits,' Kempczinski said. Recommended Reading McDonald's Snack Wrap launch leads to double-digit traffic jump Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New York Post
6 days ago
- Business
- New York Post
McDonald's sales bounce back from drastic declines as value meals win over anxious US customers
McDonald's reported better-than-expected earnings on Wednesday — as the fast-food chain's push into value meals and promotional tie-up attracted budget-conscious diners amid economic uncertainty. The Chicago-based company said same-store sales increased 3.8% in the second quarrter rose — the biggest jump in nearly two years years and easily topping estimates of 2.4% increase by LSEG analysts. McDonald's — which found success last year by offering $5 meal deals and the buy-one, add-one for $1 offer — launched a limited-time Happy Meal offer for kids and adults tied to the 'Minecraft' Movie promotion in April. In May, it introduced McCrispy Chicken Strips as a permanent menu item. 3 McDonald's saw a 3.8% rise in global same-store sales in the second quarter. Getty Images The moves helped the company 'draw 're-engage with critical' low-income diners, as they typically visit the Big Mac chain more frequently than middle- and high-income groups, according to McDonald's CEO Chris Kempczinski. 'This bifurcated consumer base is why we remain cautious about the overall near-term health of the US consumer,' he said Wednesday during an earnings call. McDonald's outperformed the rest of the industry in the second quarter with visits jumping 0.8%, above a 0.7% dip in the overall quick-service restaurant sector, according to data from which tracks foot traffic at retail locations. 'While rivals like Yum Brands and Chipotle struggled with consumer pullback, McDonald's played to its strengths by leaning into value, nostalgia and limited-time promotions,' eMarketer analyst Zak Stambor said. Same-store sales in the US – which is McDonald's largest market – rose 2.5%, above a 0.7% decline in the same period last year. It represented a massive rebound from a steep 3.6% drop last quarter, which was the worst decline since 2020. 3 McDonald's sales beat was driven by a rebound in US demand as the company focused on value messaging. Getty Images 3 Same-store sales rose 2.5% in the US, representing a massive rebound from the quarter before. Getty Images McDonald's performed even better outside the US, with its international developmental licensed markets division – which includes Japan and China – reporting same-store sales growth of 5.6%. Same-store sales in its international operated markets segment – which includes the UK, Australia and Canada – rose 4%. Earnings per share jumped 7% from the year before to $3.19 in the second quarter, beating Wall Street estimates of $3.15. McDonald's reported revenue of $6.84 billion, above projections of $6.7 billion. Executives said McDonald's results will likely be even stronger in the second half of the year, especially since the fourth quarter will probably far outperform compared to last year – when a widespread E. coli outbreak throttled demand.
Business Times
6 days ago
- Business
- Business Times
McDonald's global sales top estimates as affordable meal options boost demand
[CHICAGO] McDonald's global comparable sales beat Wall Street expectations for second quarter, as affordable meal bundles and promotions drew in budget-conscious diners looking to stretch their US dollars amid persistent economic uncertainty. Strong demand in the US and international markets powered a 3.8 per cent rise in global same-store sales, above expectations of a 2.4 per cent rise, according to data compiled by LSEG. Shares of the Chicago, Illinois-based company rose about 3 per cent in premarket trading. Fast-food chains have seen competition heat up as companies such as McDonald's, Domino's Pizza and Taco Bell owner Yum Brands double down on value meals to counter a slowdown in demand, mainly among the lower-income households. To improve sales, McDonald's launched a limited-time Happy Meal offer for kids and adults tied to the 'Minecraft' Movie promotion in April. In May, it introduced McCrispy Chicken Strips as a permanent menu item. These promotions are in addition to the US$5 meal deal and the buy-one, add-one for US$1 offers launched last year. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Menu innovation and promotions had also helped Domino's report upbeat US same-store sales, while weakening demand hurt sales at Yum Brands and Chipotle Mexican Grill. For the second quarter, McDonald's outperformed the wider quick-service restaurant category, with visits rising 0.8 per cent from a year ago and compared to a 0.7 per cent dip in the QSR space, data from foot traffic tracking firm showed. The launch of Snack Wraps on July 10 boosted visits to US stores at the start of the third quarter, analyst RJ Hottovy said. Comparable sales in US, McDonald's biggest market, grew 2.5 per cent, compared with a 0.7 per cent decline a year ago. Sales in its business segment where restaurants are operated by local partners, jumped 5.6 per cent, led by Japan, while international markets sales rose 4 per cent, owing to a demand recovery in the UK, Canada and France. Adjusted net income came in at US$2.29 billion, or US$3.19 per share, up 7 per cent from a year ago. REUTERS
