Key Moments
- U.S. comparable sales declined 0.2% in the quarter ended September 30, marking the first drop after five consecutive quarters of growth.
- Customer visits to McDonald’s U.S. restaurants fell 4.6% year-over-year in the third quarter and remained below prior-year levels in October.
- Despite U.S. softness, global comparable sales rose 1.5% and adjusted earnings increased to $3.57 per share, supported by about a 4% reduction in operating costs and expenses.
U.S. Consumers Pull Back Despite Aggressive Value Offers
McDonald’s (NYSE:MCD) reported a larger-than-anticipated drop in U.S. sales as consumers under financial pressure scaled back restaurant spending, extending a slowdown that has challenged the company’s push to attract budget-conscious diners with value-driven promotions.
Over the past two years, the burger chain has introduced multiple low-price initiatives, including an under-$3 menu and a $4 breakfast meal. These efforts have targeted customers contending with higher living costs who have increasingly turned to rivals, convenience stores, and meals prepared at home.
First U.S. Comparable Sales Decline in Six Quarters
Comparable sales in the company’s largest market fell 0.2% in the quarter ended September 30, according to data compiled by LSEG. Analysts had expected a 0.1% decline. This marks McDonald’s first negative U.S. comparable sales result after five straight quarters of growth.
| Metric | Latest Quarter | Expectation / Prior Period |
|---|---|---|
| U.S. comparable sales | -0.2% | -0.1% expected |
| Global comparable sales | +1.5% | In line with expectations |
| Adjusted earnings per share | $3.57 | $3.22 a year earlier |
| Operating costs and expenses | Roughly 4% decline | Year-over-year comparison |
Traffic Weakness Persists Into October
Customer traffic remained soft in the third quarter. Data from Placer.ai showed visits to McDonald’s restaurants declined 4.6% in the three-month period compared with a year earlier.
Traffic trends stayed below year-ago levels in October as well, even with the return of the McDonald’s Monopoly promotion and Halloween-themed Boo Buckets, indicating continued caution among consumers.
Management Commentary on Value Strategy
CEO Chris Kempczinski said in a statement on Wednesday that the company was “encouraged by improvement as the quarter progressed following our intervention on value.” Earlier, Chief Financial Officer Ian Border told investors at a September 23 event that U.S. sales would likely be negative for the quarter, but that September would likely be positive.
Competitive Landscape and Global Performance
McDonald’s results came alongside mixed performances from competitors. Restaurant Brands International, the parent of Burger King, exceeded sales forecasts last week, supported by discounts and promotional activity. Yum Brands reported on Tuesday that Tex-Mex chain Taco Bell has returned to sales growth after a setback related to food safety.
On a global basis, McDonald’s comparable sales increased 1.5%, matching expectations. Profitability improved as adjusted earnings rose to $3.57 per share from $3.22 a year earlier, aided by a roughly 4% reduction in operating costs and expenses.
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