McDonald’s regulars are reducing their fast-food trips, fueling concerns about an economic malaise fanning across American consumers.
The burger giant posted a 3% drop in revenue in the first quarter. Same-store sales in the U.S. dropped 3.6% from the prior year, the steepest decline since 2020.
The broader fast-food sector is in a rough patch, McDonald’s Chief Executive Chris Kempczinski told investors on a Thursday conference call. Restaurant visits have declined in the first quarter more than industry executives were anticipating in many large markets, including the U.S., he said.
Low-income consumers particularly pulled back on their spending, but so did middle-income households, Kempczinski said. Higher-income consumers maintained their visits, illustrating the “divided U.S. economy,” he said.
“People are just being more judicious,” Kempczinski said.
McDonald’s shares declined 2% in Thursday trading. Shares were up 10% this year through Wednesday’s close, outperforming an S&P subindex of restaurants.
Consumer spending has slowed , according to federal economic data released this week, and a number of restaurants have reported declining sales as customers feel shaky about their finances.
Business at Chipotle Mexican Grill, which notched robust sales growth in the years after the Covid-19 pandemic, is cooling . Domino’s Pizza, Starbucks, Pizza Hut and KFC this week reported a slowdown in their U.S. businesses in the first few months of 2025. Some brands have pointed to lower-income and Hispanic shoppers reducing spending.
The picture isn’t completely bleak. Brands are pushing deals to try to improve sales, with Taco Bell and Chili’s reporting increases in guest traffic as a result of their efforts. But economic data and consumer confidence need to improve to help restaurants fully bounce back, Domino’s CEO Russell Weiner said.
When McDonald’s entered a sales funk last year, the chain turned to new value options to try to woo back inflation-weary customers. Signs of progress had begun to emerge before an E. coli outbreak delayed the turnaround.
Kempczinski said he expects the first quarter to be a low for McDonald’s in the U.S., with traffic improving as it rolls out new offerings.
A Happy Meal promotion tied to “A Minecraft Movie” has boosted sales in the current quarter. Consumers are buying new chicken strips that just debuted and later this year the chain plans to test new beverages inspired by its CosMc’s pilot. McDonald’s will also continue offering its McValue menu, with meals starting at $5.
The company on Thursday reported $6 billion in revenue for its most recent quarter. Global same-store sales declined 1%, with improvements in performance in the Middle East and Japan helping offset declines in the U.K.
Net income fell 3% to $1.87 billion. Earnings per share adjusted for one-time items were $2.67, while analysts expected $2.66.
McDonald’s also reiterated its expectations for operating margins, capital expenditures and new restaurant development for the year.
Write to Heather Haddon at heather.haddon@wsj.com