McDonald's (MCD) second-quarter revenue fell short of market expectations on Tuesday as comparable sales growth in the US slowed on a yearly basis amid a challenging consumer environment.
The fast-food giant's revenue rose to $7.1 billion for the June quarter from $6.84 billion the year before, just shy of the FactSet-polled consensus of $7.13 billion. Adjusted earnings increased to $3.38 per share from $3.19, ahead of Wall Street's $3.32 view.
Global comparable sales rose 1.3%, in line with the average analyst estimate, but decelerating from a 3.8% gain in the year-ago quarter. Growth slowed to 0.8% in the US from 2.5%, weighed down by "negative comparable guest counts," McDonald's said.
The results reflected a "challenging consumer environment that saw (the quick service restaurant) industry traffic in several of our largest markets continue to be flat to negative," Chief Financial Officer Ian Borden said during an earnings call, according to a FactSet transcript.
US comparable sales were "slightly" negative in April, Borden said on the call. Certain execution factors such as pulling back on digital offers and removing the "buy one, add one for $1" feature hurt customer visits, the CFO added.
"We're acting with urgency to improve our baseline guest traffic and put the US business in a stronger position as we exit 2026," Borden told analysts.
Last week, RBC Capital Markets said a weak consumer environment could weigh on McDonald's same-store sales growth in the second and third quarters, though the brokerage expected tailwinds from factors including FIFA World Cup promotions.
In a separate statement, McDonald's said it appointed Skye Anderson as president of McDonald's USA, effective Tuesday, as part of efforts to boost long-term profitable growth of the US business. Anderson, who previously served as chief operating officer of the US division, will succeed Joe Erlinger, who will leave the company.
The fast-food heavyweight now expects to reach 50,000 restaurants globally in 2028, compared with its previous plans to reach that level by the end of next year, Borden said on the call. The delay is attributable to the pressured consumer environment and the inflationary impact on development costs, he said.
Last week, KFC owner Yum Brands (YUM) reported better-than-expected second-quarter earnings, although revenue missed estimates as a recent food-safety issue weighed on demand at Taco Bell.
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