Latest news with #MealDeal
Yahoo
05-05-2025
- Business
- Yahoo
MCD Q1 Earnings Call: Consumer Pressure, Menu Innovation, and Value Initiatives Shape Outlook
Fast-food chain McDonald's (NYSE:MCD) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 3.5% year on year to $5.96 billion. Its non-GAAP profit of $2.67 per share was in line with analysts' consensus estimates. Is now the time to buy MCD? Find out in our full research report (it's free). Revenue: $5.96 billion vs analyst estimates of $6.12 billion (3.5% year-on-year decline, 2.7% miss) Adjusted EPS: $2.67 vs analyst estimates of $2.67 (in line) Adjusted EBITDA: $3.19 billion vs analyst estimates of $3.28 billion (53.5% margin, 2.8% miss) Operating Margin: 44.5%, in line with the same quarter last year Free Cash Flow Margin: 34.2%, up from 29.9% in the same quarter last year Locations: 43,756 at quarter end, up from 42,018 in the same quarter last year Same-Store Sales fell 1% year on year (1.9% in the same quarter last year) Market Capitalization: $223.1 billion McDonald's first quarter results were shaped by broad-based consumer pressures, particularly among low and middle income groups, as management cited macroeconomic uncertainty and dampened industry traffic in key markets. CEO Chris Kempczinski pointed to the impact of inflation and reduced consumer sentiment, especially in the U.S., noting, 'Unlike a few months ago, QSR traffic from middle income consumers fell nearly as much [as low income], a clear indication that the economic pressure on traffic has broadened.' Looking forward, management remains cautious about the near-term environment but expects improvement as new value offerings and menu innovation roll out. Kempczinski emphasized the importance of operational execution and highlighted upcoming product launches, including McCrispy Chicken Strips and expanded beverage offerings. While the leadership team reaffirmed its full-year targets, CFO Ian Borden noted, 'We remain focused on optimizing our run the business spend as we continue to invest in our strategic growth priorities, such as digital and technology.' Management attributed first quarter performance to a combination of consumer headwinds, strategic value initiatives, and operational changes across major markets. Wall Street's revenue expectations were not met due to industry traffic declines, particularly among lower income consumers. Forward-looking commentary emphasized the need for ongoing menu innovation, improved value perception, and operational discipline. U.S. Value Platform Expansion: The launch of the McValue platform, including the $5 Meal Deal, was central to management's response to declining guest counts. Management described the program as 'resonating with customers' and expects it to continue throughout 2025. Menu Innovation Pipeline: New products such as McCrispy Chicken Strips and upcoming snack wraps are intended to drive incremental traffic. Management sees these innovations as key to attracting new and returning customers. International Market Performance: While most major international markets faced similar pressures, management highlighted market share gains in France following value-focused initiatives and menu news like the Big Arch burger. Operational Structure Changes: McDonald's established a global Restaurant Experience Team and introduced category leadership for beef, chicken, and beverages. This is designed to accelerate product innovation and improve execution across markets. Customer Satisfaction Focus: The company reported all-time high customer satisfaction scores in the U.S. and major international markets, attributing improvements to both value platforms and operational enhancements. Management's outlook for the remainder of the year is shaped by continued economic uncertainty, but is anchored in expanded value platforms, new product launches, and a focus on operational execution to drive guest count-led growth. Macroeconomic Headwinds Persist: Management remains cautious about consumer sentiment, especially among low and middle income groups, and acknowledges ongoing challenges from inflation and global uncertainty. Product and Marketing Rollouts: Upcoming launches such as McCrispy Chicken Strips, expanded beverage tests, and brand partnerships (e.g., Minecraft Movie campaign) are expected to support sales momentum. Execution and Cost Discipline: Management emphasized the importance of running efficient operations, optimizing spending, and leveraging digital and technology investments to protect margins and support growth. Dennis Geiger (UBS): Asked about U.S. sales trajectory given early success with the Minecraft campaign and new menu items. Kempczinski noted momentum is expected to build as the year progresses, with execution remaining key in a pressured environment. David Tarantino (Baird): Inquired if the McValue platform requires sharper price points to drive incrementality. Kempczinski said the $5 Meal Deal is performing well but is open to adjustments for greater impact. Brian Harbour (Morgan Stanley): Questioned if there is risk of negative mix shift as more value items are introduced. Borden explained that value and innovation must be balanced to ensure both traffic and profitability. Jon Tower (Citi): Sought details on the beverage test and its potential impact. Kempczinski described the opportunity for higher-margin growth but said investment needs and positioning are still being evaluated. Sara Senatore (Bank of America): Asked if QSR traffic declines reflect share loss to other segments. Kempczinski argued that reduced visit frequency, not segment shift, is the main driver, especially in breakfast and other dayparts. In the coming quarters, the StockStory team will be monitoring (1) the effectiveness of new value initiatives and menu innovations in stabilizing U.S. guest counts, (2) the operational impact of the global Restaurant Experience Team on product rollouts and execution, and (3) progress in international markets, particularly regarding market share gains and consumer sentiment. These factors will be critical to tracking McDonald's ability to regain momentum. McDonald's currently trades at a forward P/E ratio of 25.3×. Should you double down or take your chips? See for yourself in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
Yahoo
02-05-2025
- Business
- Yahoo
Largest US restaurant chain is closing hundreds of stores at an alarming rate
According to franchise disclosure documents, Subway had fallen below 20,000 U.S. locations for the first time in 20 years. The sandwich chain has been losing restaurants in the U.S. for the last eight years in a row. In 2024, it closed 631 restaurants, making the total number in the country 19,502. Despite this loss, Subway is still the largest restaurant chain in the country. There are 37,000 Subway locations globally, marking the second consecutive year the sandwich chain has grown with its international presence. In a statement to CNN, the company said it would continue to review its presence in the U.S. 'using a strategic, data-driven approach to ensure restaurants are in the right location, image and format and operated by the right franchisees.' Subway said it is 'opening new restaurants as well as relocating or closing locations as needed, to ensure a consistent, high-quality and convenient guest experience.' The news of the sandwich chain's closures comes months after it canceled its $6.99, six-inch Meal Deal back in November 2024 after the promotion failed to take off. The deal was reportedly pulled from stores on November 27 due to poor performance, just weeks after it was introduced on National Sandwich Day (November 3). The promotion included any six-inch sub and a choice of a small drink and chips, or two cookies for $6.99. 'The Meal Deal was designed to help drive a lift in traffic, sales and, ultimately, restaurant-level profitability, and delivered on these objectives during the market test,' a message from Subway read at the time. 'While the national Meal Deal promotion is delivering the expected number of daily redemptions, overall the promotion is not driving the anticipated results.' 'Subway's approach to value is thoughtful and strategic, leveraging data to help balance consumer needs while protecting franchise profits,' the company said. 'We continuously test new value platforms aimed at helping drive profitable traffic and encouraging repeat visits.' Retail companies have also struggled this year, with multiple JCPenney stores across seven states set to close by the end of May. JCPenney did call the seven closures 'isolated' and further stated there are 'not plans to significantly reduce our store count.' The company previously said the closures were 'unrelated to' the brand's recent merger with the SPARC Group, which formed Catalyst Brands, an organization of six major retailers.
Miami Herald
02-05-2025
- Business
- Miami Herald
Popular breakfast fast-food chain adds new items and deals
May is finally here, which means that summer is right around the corner and vacation destinations are open for the season. What's even more exciting is that this is also when restaurant and fast-food chains begin to drop their highly anticipated limited-time summer menus for the year. Don't miss the move: Subscribe to TheStreet's free daily newsletter Menus nationwide will be filled with various iced beverages, tropical sweet treats, and multiple deals, since these chains know most people will be out and about for the next few months. Related: Popular breakfast restaurant chain menu adds deal amid closures This year, competition for the best deals is high. This is good for consumers, since it gives them more value for their money, but challenging for businesses because they have to compete with sometimes unsustainably low price comparisons. Image source: Corbis/Getty Images As breakfast lovers awoke this morning, Dunkin' quickly hit them with the first email of the month, revealing its 2025 summer menu. Dunkin' is already known for being among the most affordable coffee chains because, unlike its rivals, it has chosen not to offer $8 lattes. Instead, it keeps its products within a decent price range, and this time, the deals are better and more plentiful than ever. The breakfast fast-food chain will keep the $6 Meal Deal momentum going but is giving it a fresh twist by changing its offerings. Customers still get a medium hot or iced coffee and hash browns with this deal, but it now comes with a Bacon, Egg & Cheese Sandwich. Dunkin' did a two-in-one this season by releasing a new Tropical Guava Dunkin' Refresher that costs only $3. This new drink allows customers to combine iced green tea, lemonade, or sparkling water with passion fruit, orange, and guava flavors. Related: Another fast-food burger chain is quietly closing locations However, that's not the only new item on its summer menu. The company has also released the new Ham & Swiss Pretzel Sliders in partnership with King's Hawaiian and revamped its beloved Iced Lemon Loaf with a strawberry twist. Due to popular demand, Dunkin' has returned its fan favorite Chicken & Bacon Croissant Stuffer and the Sweet Black Pepper Bacon. Although Dunkin's $6 Meal Deal may seem like a total bargain, it faces stiff competition from its breakfast-restaurant rivals. IHOP (DIN) relaunched the $6 House Faves menu nationwide, featuring four of the chain's most popular breakfast combos, including the Breakfast Faves Combo, House Scramble, Ham & Cheese Omelette, and French Toast Breakfast. The dishes cost around $6 to $7 each, depending on the location, and are available Monday through Friday from 7 a.m. to 10 p.m., as stated on its website. More Retail News: Popular formerly bankrupt retail chain makes brick-and-mortar comebackWendy's menu adds fast-fast food take on hot new trendChipotle CEO sounds alarm on concerning customer behavior Not far behind is Denny's (DENN) with the return of its famous $2/4/6/8 Value Menu after a temporary hiatus. However, it added more dishes this time, including dinner items. For breakfast, Denny's now offers the Everyday Value Slam, Loaded Breakfast Sandwich, Super Slam, and three add-ons, including the Stack of Original Pancakes, Choconana Pancakes, and French Toast. For dinner, customers can order the Mama's Fried Chicken Salad, Chicken Tenders & Fries, Classic Burger with Fries, Grilled Cheese with a bowl of soup or side salad, and a New York Style Cheesecake add-on. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Daily Mail
02-05-2025
- Business
- Daily Mail
McDonald's quietly reveals plan to lure back customers after biggest sales drop since height of pandemic
McDonald's has revealed its game plan to win back customers after it suffered its biggest drop in US sales since lockdowns. Sales at US restaurants fell 3.6 percent in the first quarter of the year, as inflation-weary Americans pulled back on spending amid economic uncertainty caused by Trump's new tariffs. It was the biggest sales drop since the pandemic when lockdowns forced restaurant closures. Bosses say that keeping deals going is their best bet to lure customers back. The fast food giant will extend its $5 Meal Deal through 2025 — ending fears among fans it would end soon. The deal — which includes a choice of the McDouble or McChicken sandwich, small fries, four Chicken McNuggets and a small soft drink — was first introduced last summer. The combo kicked off the 'value wars' among fast food rivals, who scrambled to compete with low cost combo deals of their own. McDonald's CEO Chris Kempczinski said lower and middle-income consumers, worried about inflation and the economic outlook, cut back on fast food during the January-March period. 'We believe McDonald's can weather these difficult conditions better than most,' Kempczinski told investors on the Thursday earnings call. 'However, we're not immune to the volatility in the industry or the pressures that our consumers are facing.' McDonald's saw same-store sales fall 1 percent globally in the first quarter compared to the same time last year. Rivals are also feeling the effects of a consumer pullback with KFC and Pizza Hit both seeing falls in sales. Chipotle also reported weaker-than-expected same-store sales in the first quarter and has set out a game plan for heading in to a downturn. Building on the need to represent value-for-money, McDonald's also introduced a McValue menu, which allows customers to buy one item for $1 when they buy another full-priced item. Kempczinski told analysts the $5 Meal Deal is resonating well with consumers but the McValue menu is not driving the additional sales the company expected, so it could soon see changes. 'While we may adjust our current McValue offerings over time, for the remainder of 2025, we'll continue to include everyday value meal deals starting at $5, given how the current $5 Meal Deal in particular has resonated with customers,' Kempczinski explained. As well as damage to consumer's wallets policy flip-flops from the Trump administration have hurt businesses across industries, threatening to push up costs and upend supply chains. The McDonald's $5 Meal Deal consists of a McDouble or McChicken, small fries, four-piece chicken nuggets, and a small drink for $5 The broader economy is showing signs of strain. US GDP contracted last quarter for the first time in three years, raising fears of a 2025 recession. The previous quarter had shown 2.4 percent growth, according to the Bureau of Economic Analysis. The contraction doesn't reflect the full fallout from President Trump's sweeping 'Liberation Day' tariffs, which were rolled out in early April and partially reversed a week later.
Yomiuri Shimbun
02-05-2025
- Business
- Yomiuri Shimbun
Mcdonald's Store Traffic Falls Unexpectedly as Diners Grow Uneasy about Economy
AP file Photo/Gene J. Puskar McDonald's restaurant signs are shown in in East Palestine, Ohio, Feb. 9, 2023. McDonald's reports earning on Monday, July 29, 2024. McDonald's store traffic fell further than expected in the first quarter as economic uncertainty weighed on diners. The trouble was particularly acute in the U.S., where same-store sales — or sales at locations open at least a year — slumped 3.6%. 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. McDonald's Chairman and CEO Chris Kempczinski said lower- and middle-income consumers, worried about inflation and the economic outlook, cut back on fast food during the January-March period. Industrywide traffic from consumers making $45,000 per year or less was down by double-digit percentages, he said, and traffic from middle-income consumers was down nearly as much. Only traffic from those making $100,000 or more remained solid, he said. 'We believe McDonald's can weather these difficult conditions better than most,' Kempczinski said Thursday in a conference call with investors. 'However, we're not immune to the volatility in the industry or the pressures that our consumers are facing.' McDonald's rivals have reported similar downturns. Yum Brands, which owns the Taco Bell, KFC, Habit Burger & Grill and Pizza Hut brands, said Wednesday that its U.S. same-store sales fell 2% in the first quarter. Chipotle also reported weaker-than-expected same-store sales in the first quarter. McDonald's same-store sales fell 1% globally in the first quarter, as growing traffic in Japan, China and the Middle East failed to overcome weakness in markets like the U.K. 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 2%, according to analysts polled by FactSet. The Chicago-based chain has responded by introducing a U.S. McValue menu, which lets customers buy one item for $1 when they buy a full-priced item. It also announced Thursday that its $5 Meal Deal will run through the rest of this year. That deal was introduced last June and extended several times. Kempczinski said the $5 Meal Deal is resonating well with consumers but the McValue menu is not driving the additional sales the company expected, so McDonald's may make changes to it. Kempczinski said McDonald's had expected the first quarter to be its weakest this year. Already, things are looking up. In April, a McDonald's meal tied to 'A Minecraft Movie,' which was offered in 100 countries, sold out of its collectible figures in less than two weeks. New chicken strips and the U.S. return of the snack wrap — exected later this year — are also expected to drive traffic, Kempczinski said. McDonald's reaffirmed its financial targets for the full year despite the impact of tariffs. And Kempczinski said McDonald's internal surveys show that anti-American sentiment, particularly in Canada and Northern Europe, doesn't seem to be impacting how consumers feel about the McDonald's brand. McDonald's shares were down 1% in morning trading Thursday. McDonald's first quarter revenue fell 3% to $5.95 billion, short of analysts' forecast of $6.09 billion, according to FactSet. Net income fell 3% 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.
