In This Article:
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Global Comp Sales: Declined by 1% in the first quarter.
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US Comp Sales: Declined 3.6% due to broad-based consumer challenges.
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Adjusted Earnings Per Share: $2.67 for the quarter, a 1% increase in constant currencies.
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Restaurant Margins: Generated over $3.3 billion for the quarter.
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Adjusted Operating Margin: Approximately 45.5%.
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International Developmental Licensed Markets Comp Sales: Increased by 3.5%, driven by positive results in the Middle East and Japan.
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Foreign Currency Translation Impact: $0.04 headwind on earnings per share.
Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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McDonald's Corp (NYSE:MCD) has launched a new McValue platform in the US, which includes a $5 meal deal that has resonated well with customers.
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The company has introduced exciting new menu items, such as McCrispy Chicken Strips, which are expected to drive growth.
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McDonald's Corp (NYSE:MCD) has achieved all-time high customer satisfaction scores in the US, indicating strong operational execution.
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The Minecraft movie marketing campaign was a success, with collectibles selling out faster than anticipated, demonstrating effective promotional strategies.
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The company is focusing on beverages as a growth area, with plans to expand its offerings and capture a larger share of the profit pool in this category.
Negative Points
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Global comp sales declined by 1% in the first quarter, with a 3.6% decline in the US, reflecting broad-based consumer challenges.
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Traffic from low- and middle-income consumers in the US has significantly decreased, indicating economic pressures on these cohorts.
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The UK market is not yet gaining share, and execution improvements are needed to address this issue.
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The company faces a more inflationary environment in Europe, particularly due to beef prices, which impacts profitability.
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Despite the success of the McValue platform, the buy-one-add-one-for-a-dollar component is not driving as much incrementality as expected.
Q & A Highlights
Q: Can you discuss the recent US sales trajectory and momentum, considering the consumer pressures and the impact of the Minecraft marketing campaign? A: Christopher Kempczinski, CEO, noted that the year is evolving as expected, with Q1 being the toughest quarter. The Minecraft promotion exceeded expectations, selling out collectibles in 10-14 days. The focus now is on execution, especially in a pressured consumer environment, to drive growth through value programs, marketing, and menu innovation.