McDonald's tops forecasts as value meals tempt customers in tough environment

(Sharecast News) - McDonald's beat Wall Street expectations with its latest quarterly results on Thursday, as the fast-food giant benefitted from stronger demand for value meals and promotional offers amid a tougher backdrop for consumer spending.

The Chicago-headquartered burger giant posted first-quarter revenue of $6.52bn, up 9% year-on-year and above the $6.46bn consensus estimate. System-wide sales, which include both owned restaurants and franchised stores, increased 11% over last year to over $34bn.

Global comparable sales increased 3.8%, helped by higher spending per visit and improved traffic trends, though this was slightly below market estimates, with US same-store sales growth slowing to 3.9% from 7% the preceding quarter.

However, net profit rose 6% to $1.98bn, with adjusted earnings per share of $2.83 comfortably ahead of analyst forecasts of $2.74.

Chief executive and chairman Chris Kempczinski said the company "delivered [...] even in a challenging environment", highlighting its focus on affordability as consumers face pressure from elevated fuel and grocery prices.

"Our value leadership, breakthrough marketing, and menu innovation continue to serve up what customers want," he said.

In April, McDonald's unveiled a new under-$3 menu and a $4 meal deal for breakfasts, which have reportedly won over customers alongside its standard-priced offering.

Analysts also highlighted the boost to sales from a March social media post of Kempczinski taste-testing McDonald's new Big Arch burger, which resulted in a small spike in sales after the video went viral.

McDonald's futures were up 3.5% at $294.10 in pre-market trade on Wall Street, rebounding slightly after a near-17% plunge since the outbreak of the Iran war in late-February.