McDonald’s Customers Spent More Last Quarter

McDonald's this week reported quarterly earnings and revenue that beat analysts' expectations as diners spent more at its U.S. restaurants even in what CEO Chris Kempczinski called "a challenging environment," according to a recent earnings report from McDonald's.

McDonald's reported first-quarter net income of $1.98 billion, up from $1.87 billion a year earlier. Net revenue rose 9% to $6.52 billion.

"Clearly, when you have elevated gas prices, which is the core issue that I think we're all seeing about in the press right now, gas prices, inflation on that, that is going to disproportionately impact low-income consumers," Kempczinski said. "And so we expect the pressures there are going to continue."

Restaurants are currently battling it out for business as the rising cost of gasoline and other expenses have many consumers cutting back, wrote The Wall Street Journal. "Many chains have taken a hit this year, with companies including Shake Shack, Wingstop and Papa John's reporting disappointing sales in recent weeks," the outlet wrote. Shake Shack is currently promoting $1, $3 and $5 deals and new menu items to try to boost business.

McDonald's has not only offered meal deals but has also launched themed meals to appeal to customers, which usually come at a slightly higher price point. WSJ highlighted tie-in meals with "The Super Mario Galaxy Movie" and "K-Pop Demon Hunters" for boosting visits and sales.

However, CNBC wrote that one area of McDonald's U.S. business disappointed executives: its company-owned restaurants. "Those locations, which account for less than 5% of its total U.S. footprint, have been seeing weaker margins, so McDonald's is considering selling them to franchisees," the outlet said.

Earlier this year, the QSR unveiled plans to open more than 8,000 new locations globally by the end of 2026, which is part of a larger goal to reach at least 50,000 locations by 2027. It is also targeting menu improvements, and will test new drink options, including energy drinks and dirty sodas, that were previously piloted through its past CosMc's concept.