McDonald’s Beats Q1 Estimates but CEO Warns Consumer Spending Is Weakening

CNBC reported Thursday that McDonald’s cleared Wall Street’s first-quarter expectations on both earnings and revenue. But an upbeat set of numbers was quickly overshadowed by cautious comments from the top.

McDonald’s CEO Chris Kempczinski told analysts on the earnings call that conditions for shoppers are not improving. “It may be getting a little bit worse,” he said, according to CNBC. Shares initially jumped more than 3% in premarket trading before paring most of those gains.

Q1 Numbers Show Resilience Despite Tough Backdrop

The fast-food giant posted adjusted earnings of $2.83 per share, topping the $2.74 consensus estimate. Net revenue climbed 9% year over year to $6.52 billion, edging past forecasts of $6.47 billion. Net income reached $1.98 billion, up from $1.87 billion in the same period a year earlier.

Global same-store sales rose 3.8%, broadly in line with analyst expectations. U.S. same-store sales grew 3.9%, driven by customers spending more per visit rather than increased traffic.

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Gas Prices and Low-Income Pressure Cast a Shadow

Kempczinski pointed to surging fuel costs as a particular burden for lower-income consumers. Elevated gas prices, he said, disproportionately squeeze that cohort and are expected to remain a persistent headwind throughout the year.

Several restaurant peers have reported similar trends. Chains including Domino’s and Chipotle have each flagged softening March sales after geopolitical disruptions contributed to higher energy costs. McDonald’s believes its value-focused positioning can help it capture share from competitors even as overall dining-out frequency declines.

Background: A Stock Under Pressure, a Brand Leaning on Value

McDonald’s shares have fallen roughly 10% over the past year, weighed down by broader economic uncertainty. The company has responded by doubling down on affordability while layering in premium limited-time offerings, such as the supersized Big Arch burger launched in early March, to lift average check sizes.

Promotional tie-ins with “The Super Mario Galaxy Movie” and “KPop Demon Hunters” were sold at full price, reflecting McDonald’s effort to drive excitement without sacrificing margin.

What Comes Next for McDonald’s

CFO Ian Borden flagged that Q2 comparisons will be tough. Last year’s “Minecraft” movie promotion set a high bar. Borden said the deceleration was anticipated before consumer sentiment softened further, and expressed confidence in the company’s value strategy carrying through the rest of 2026.

McDonald’s is also exploring selling its company-owned U.S. restaurants, which represent under 5% of its domestic footprint, to franchisees after those locations showed weaker margin performance.

Read Next: Chipotle Sales Soften in March as Diners Pull Back on Spending