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Consumers are not lovin’ it: McDonald’s has its worst quarter since 2020

McDonald’s reported its worst quarterly sales for the United States since the height of the pandemic in 2020, the latest restaurant chain to be affected by America’s turbulent economic environment.

The burger giant reported U.S. same-store sales fell 3.6%, the largest three-month drop since Q2 2020, when they plunged 8.7%. Forecasts had been for a decline of just 1.7%.

‘Consumers today are grappling with uncertainty,’ McDonald’s Chairman and CEO Chris Kempczinski said in a statement, as the chain cited lower guest counts.

In a follow-up call with investors, McDonald’s executives said that traffic among middle-income diners fell by ‘nearly double digits’ alongside an ongoing drop-off among low-income ones. As an example, they said more people appear to be skipping breakfast entirely to cut back on spending, or eating breakfast at home.

‘People are just visiting less,’ they said.

High-income traffic, meanwhile, remained stable, they said.

That reflects the economy writ large: While less-well-off consumers rein in transactions to focus on essentials, wealthy consumers continue to spend freely.

McDonald’s is the latest restaurant chain to report weak financial results amid signs that consumers are pulling back on discretionary spending. Chipotle, Domino’s, Pizza Hut, Shake Shack and Starbucks all saw slowing or declining sales in their quarter, with many citing particular weakness among lower-income consumers.

McDonald’s also reported revenues that missed forecasts for the third time in four quarters.

The more volatile economic environment that’s been accelerated by President Donald Trump’s tariffs policies is also being felt abroad.

On the call, company officials said that while the McDonald’s brand hadn’t been affected by worsening perceptions of the U.S. by overseas consumers, its internal surveys had picked up a notable uptick in anti-American sentiment, particularly among diners in northern Europe and Canada.

‘We have seen … an increase in people in various markets saying they’re going to be cutting back on purchases of American brands,’ they said.

It nevertheless maintained its full-year financial outlook, including plans to open 2,200 locations, which it said should help boost sales growth by slightly more than 2%. It said a promotional tie-in with the ‘Minecraft Movie’ had been a hit, and that its refreshed value offerings continued to position it strongly compared with competitors.

Still, officials said on the call that they remained “cautious about consumer sentiment.”

Shares fell 1.6% in early trading.

This post appeared first on NBC NEWS

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