McDonald's Corporation (MCD.US) Q1 performance has mixed results: revenue and profits exceeded expectations, but the growth of same-store sales in the United States fell short of targets.

Global fast food giant McDonald's Corporation (MCD.US) announced its first quarter financial report on Thursday, showing a strong but slightly lackluster performance. Despite exceeding expectations in revenue and profit in a challenging consumer environment, the company fell short of Wall Street's expectations in same-store sales growth in the US market. The financial report revealed that McDonald's Corporation's adjusted earnings per share for the first quarter were $2.83, higher than the market's expectation of $2.74; revenue increased by 9% year-on-year to $6.52 billion, surpassing the expected $6.47 billion. Net profit rose from $1.87 billion in the same period last year to $1.98 billion. Boosted by this news, the stock rose by approximately 4% in pre-market trading. However, as of Wednesday's close, the stock had already dropped by 7% year-to-date. In the crucial US market, McDonald's Corporation's same-store sales growth was only 3.9%, lower than analysts' expectation of 4.2%. This slight discrepancy reflects the increasing caution of consumers facing rising fuel and grocery costs, despite the company's efforts to promote value meals and limited-time offers. Previously, several US chain restaurants including Wingstop (WING.US) reported weak quarterly sales growth, attributing it to the spike in gasoline prices due to the Iran conflict impacting consumer spending. To cater to budget-conscious consumers while also meeting quality demands, McDonald's Corporation has adopted a dual strategy. On one hand, the company has emphasized value propositions, upgrading the "McValue" platform and launching new $3 and $4 value menus in April. On the other hand, the company relies on higher-priced core products and large orders, such as the limited-time "Big Arch" hamburger and the IP collaboration meal "Super Mario Galaxy Movie," without resorting to price reductions. However, data from Placer.ai shows that McDonald's Corporation's US store traffic fluctuated in the first quarter due to winter storms. In January, same-store visits declined by 1.3%, rebounding slightly by 3.8% in February due to pent-up demand. However, in March, as gasoline prices surged due to the US-Iran conflict, consumer household budgets were further affected, leading to a 1.2% drop in store traffic that month, with a lukewarm response to the new menu offerings. Wall Street analysts point out that low-income consumers are becoming more selective, preferring to buy individual items rather than full meals. On a global scale, McDonald's Corporation's global same-store sales increased by 3.8%, slightly below analysts' expectations of 3.95%, but significantly higher than the 1% decline from the same period last year when consumer confidence was shaken due to expectations of new tariff policies by the Trump administration. Same-store sales in the International Operated Markets segment also grew by 3.9%, driven by strong demand in the UK, Germany, and Australia. In the International Developmental Licensed Markets operated by local partners, sales increased by 3.4%, with Japan being the best-performing market in this segment.