McDonald's reported quarterly earnings and revenue on Monday that missed analysts’ expectations, with same-store sales declining across all divisions.
Here's what the company reported compared to Wall Street's expectations, based on an LSEG survey of analysts:
- Earnings per share: $2.97 adjusted vs. $3.07 expected
- Revenue: $6.49 billion vs. $6.61 billion expected
The fast-food giant reported a second-quarter net income of $2.02 billion, or $2.80 per share, down from $2.31 billion, or $3.15 per share, a year earlier. Excluding charges related to the future sale of its South Korean business and other items, McDonald's earned $2.97 a share.
Quarterly revenue of $6.49 billion remained flat compared to the year-ago period.
McDonald's same-store sales fell 1%, missing StreetAccount estimates for a 0.4% increase. This marks the first decline in companywide same-store sales since Q4 2020.
In the U.S., same-store sales decreased by 0.7% for the quarter. A year ago, U.S. same-store sales had grown by 10.3%, driven by the popular Grimace Birthday Meal. Over the past year, more consumers have cut back on restaurant spending, especially at fast-food chains, which they no longer view as a good deal. McDonald's reported a decline in foot traffic to its U.S. restaurants during the quarter.
Executives had previously warned of increased competition as the consumer environment weakened. McDonald's has leaned into discounts to attract diners, launching a $5 meal deal in late June, just before the end of the quarter. The company recently informed its U.S. system that it plans to extend the value meal beyond the initial four-week period and noted that it is bringing back customers.
McDonald's is also working to attract diners outside of the U.S. Its international operated markets division, including large segments like France and Germany, saw same-store sales decline by 1.1% in the quarter. The international developmental licensed markets unit, which includes China and Japan, reported same-store sales declines of 1.3%. McDonald's continues to face challenges from boycotts in the Middle East, and sales in China remain sluggish.
