By Evie Liu and Mackenzie Tatananni

McDonald's spent the past year trying to convince customers it could still be an affordable place to eat. The strategy appears to be working.

First-quarter profit and revenue from the fast-food giant comfortably cleared Wall Street estimates on Thursday. McDonald's posted $6.52 billion in net revenue for the period, surpassing the $6.47 billion consensus among analysts polled by FactSet. Adjusted earnings of $2.83 a share topped calls for $2.74.

Global comparable sales were up 3.8%, while same-store sales in the U.S. alone rose 3.9%. Global systemwide sales, a measure of sales across restaurants operated both by the company and franchisees, rose 6% on a constant-currency basis to $34 billion in the quarter.

Shares shot up in morning trading on Thursday, but finished the session mostly flat at $283.70. McDonald's stock has fallen 7.2% this year against a 7.2% gain for the benchmark S&P 500 index.

The company struggled through much of 2024 and early 2025 as inflation-weary diners, especially lower-income households, cut back on restaurant spending. Many customers believed McDonald's had become too expensive relative to competitors.

These shifting preferences manifested clearly in the company's financial performance. U.S. comparable sales fell 1.4% year over year in the fourth quarter of 2024, and dropped another 3.6% in the first quarter of 2025.

The latest results appear to signal to investors that the company's value push is paying off. Launched in 2025, the McValue platform includes various $5 meal deals and "Buy One, Add One for $1" offers. The company further expanded the platform this year, adding many items priced below $3 along with $4 breakfast meal deals.

The fast-food chain paired those discounts with a steady stream of marketing promotions -- including the revival of its Monopoly promotion and holiday-themed Grinch meals -- designed to create excitement and drive repeat visits. Executives said the Grinch promotion helped score the highest single sales day in company history.

Fast-food hamburger chains saw a "notable but relatively brief" rebound in November and December last year during the holiday season as major brands leaned aggressively into promotions and value messaging, said Michael Gunther, vice president of research and market intelligence at Consumer Edge.

While the momentum has moderated into early 2026, McDonald's appears to have maintained relatively stronger within the sector even after the promotional lift faded.

"Promotions can temporarily lift the category, but sustained share momentum still depends on brand-specific execution, marketing resonance, and value perception," said Gunther.

McDonald's also leaned heavily in menu innovations to attract new customers. It brought back the popular Snack Wraps, added new McCrispy chicken strips, and continued promoting the Chicken Big Mac.

Management believes chicken -- one of the fastest-growing categories in fast food -- could help the company gain another point of chicken fast-food market share by the end of 2026.

The burger and fries giant is also making a serious push into specialty beverages, introducing refreshers and crafted sodas earlier this year and plans to add energy drinks later.

Beverages typically carry higher margins and help lift traffic and check size without leaning heavily on discounts. Younger consumers are increasingly viewing beverages as a treat and something to share with friends on social media.

"The soft launch results over the last week are encouraging, and we're looking forward to introducing different flavors and Red Bull-infused energy drinks throughout the year," sayd CEO Chris Kempczinski on the earnings call. "We're really excited about what we're seeing so far."

Still, management noted there are some headwinds. Same-store sales growth is expected to moderate in the second quarter, the company said.

April's growth might be particularly challenging due to the successful global Minecraft promotion that took place in April last year. Gordon Haskett analyst Jeff Farmer expects comparable sales growth to decelerate to 1.5% for both its U.S. and international operated markets segments in the second quarter, down from 3.9% in the first quarter.

Margins at some company-operated stores are also under pressure. "It's either on us to fix that, or we're going to find franchisees who could run the restaurant better," said Kempczinski.

Corrections & Amplifications

Gordon Haskett analyst Jeff Farmer expects McDonald's comparable sales growth to be 1.5% for its U.S. and international operated markets segments in the second quarter. An earlier version of this article incorrectly stated the estimates were from McDonald's management.

Write to Evie Liu at evie.liu@barrons.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 08, 2026 14:41 ET (18:41 GMT)

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