McDonald's Sees Steepest U.S. Sales Drop Since Pandemic, Yet Net Income Hits $1.87 Billion

McDonald's Corp. reported a 3.6% year-over-year decline in U.S. comparable sales for the first quarter of 2025, marking the steepest drop since the onset of the Covid-19 pandemic. This downturn was attributed to a combination of adverse weather conditions and a more cautious spending pattern among consumers.

CEO Chris Kempczinski highlighted that traffic from low-income consumers in the quick-service restaurant sector fell nearly double digits compared to the previous year, with middle-income consumers also showing significant declines. This reflects broader economic pressures affecting consumer behavior.

Despite the sales drop, McDonald's managed to exceed profit expectations with a net income of $1.87 billion, or $2.60 per share, for the quarter. The adjusted earnings per share of $2.67 slightly surpassed analyst forecasts of $2.66. The company's revenue for the quarter was $5.96 billion.

Internationally, McDonald's experienced a slight decline in comparable store sales in its operated markets, including Australia and France, which account for about half of its revenue. Conversely, the company's developmental licensed markets, such as Japan, China, and Brazil, saw a 3.5% increase in comparable sales, exceeding analyst expectations.

Looking forward, McDonald's plans to open 2,200 new locations and invest between $3 billion and $3.2 billion in capital expenditures. The company also aims to attract customers with value meals and the return of snack wraps.