McDonald's posts surprise decline in global sales in first quarter

Core Insights - McDonald's experienced a surprising decline in first-quarter global sales, with a 1% drop in comparable sales, contrary to analysts' expectations of a 0.95% increase [1] - The company's CEO highlighted the challenging market conditions, particularly due to the impact of chaotic tariffs and economic pressures on lower-income customers [2][3] Sales Performance - Comparable sales in the US, McDonald's largest market, fell by 3.6%, significantly worse than the 0.5% decline anticipated by analysts [4] - Despite the overall decline, the segment operated by local partners saw a 3.5% growth, driven by recovery in sales in the Middle East and Japan [4] Market Context - The economic environment is strained, with the US economy contracting for the first time in three years, raising concerns about a potential recession in 2025 [2] - Other restaurant operators, including Domino's Pizza, Chipotle Mexican Grill, and Starbucks, have also reported decreased consumer spending on dining out, indicating a broader trend in the industry [3] Financial Results - McDonald's reported an adjusted net income of $1.92 billion for the quarter, reflecting a 2% decrease compared to 2024 [5] - The company has attempted to stimulate demand through enhanced value menu offerings, including limited-time deals on burgers and fries [3]