McDonald's (MCD) shares surged roughly 3% in premarket trading Thursday after the fast-food giant reported first-quarter results that topped Wall Street expectations. The company posted revenue of $6.52 billion, up 9% year-over-year and ahead of the $6.47 billion consensus, while adjusted earnings per share came in at $2.83, beating the $2.74 estimate. Net profit rose 6% to $1.98 billion, signaling that its value-focused strategy is resonating even as consumer budgets tighten.
CEO Chris Kempczinski described the operating environment as "challenging," citing higher fuel and grocery costs that have made customers more cautious. Despite that, US same-store sales grew 3.9%, just missing the 4.2% forecast, while global comparable sales climbed 3.8%—a sharp reversal from the prior year's 1% decline. Traffic data from Placer.ai illustrated the bumpy quarter: visits dropped 1.3% in January due to storms, rebounded 3.8% in February, then slowed to 1.2% growth in March as gas prices rose.
The chain leaned heavily into affordability, cutting combo prices and rolling out new cold drinks to compete with premium beverage sellers like Starbucks. It also launched the Big Arch burger, which sparked a viral marketing moment and drew a response from Burger King, which reported its strongest same-store sales jump in nearly two years. Other US restaurant chains such as Wingstop and Domino's have flagged similar consumer spending pressures linked to geopolitical tensions and fuel costs.
Investors cheered the earnings beat, sending MCD stock higher. While the broader consumer landscape remains uncertain, McDonald's scale and value positioning have helped it weather the storm better than many peers.
