McDonald’s faced a challenging Q1, as revenue came in below Wall Street expectations and same-store sales declined. Management attributed these results to mounting economic pressure on lower and middle income consumers, particularly in the U.S., where CEO Chris Kempczinski noted, “QSR traffic from middle income consumers fell nearly as much as the low income cohort.” Severe weather, continued inflation, and broader macroeconomic uncertainty also weighed on performance. Despite these headwinds, McDonald’s highlighted traction from its new value platforms and global marketing efforts, aiming to stabilize traffic amid a shifting industry landscape.
Is now the time to buy MCD? Find out in our full research report (it’s free).
McDonald's (MCD) Q1 CY2025 Highlights:
- 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)
- Operating Margin: 44.5%, in line with 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: $209 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions McDonald's’s Q1 Earnings Call
- Dennis Geiger (UBS) asked how U.S. sales momentum could improve following strong marketing campaigns; CEO Chris Kempczinski emphasized that execution on value and menu innovation will be critical for growth.
- David Palmer (Evercore) questioned the divergence in international market performance versus the U.S.; CFO Ian Borden highlighted positive share gains where value and menu innovation aligned, despite ongoing inflation.
- David Tarantino (Baird) pressed on whether sharper entry-level price points are necessary; Kempczinski noted the $5 Meal Deal’s incrementality and flexibility in adapting value menus.
- John Ivankoe (J.P. Morgan) asked about core menu price variability and the outlook for menu innovation in chicken; Kempczinski stressed local pricing discipline and the anticipated halo effect from the McCrispy platform.
- Eric Gonzalez (KeyBanc) questioned if there is enough premium product innovation to sustain sales beyond short-lived promotions; Kempczinski pointed to a pipeline of new menu news throughout the year to support baseline growth.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely watch (1) the effectiveness of McValue offerings and the impact of new product launches in driving guest count recovery, (2) margin stability as inflation and mix shifts play out across regions, and (3) progress in key international markets, including the U.K. and France, as localized strategies are deployed. Execution on beverage initiatives and technology integration will also be important indicators of McDonald’s ability to adapt and compete.
McDonald's currently trades at $292.70, down from $319.62 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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