"Affordable" menu helped McDonald's boost sales despite deteriorating conditions

A bet on budget offerings and fixed-price meal kits helped McDonald's attract frugal customers and beat Wall Street's expectations for profits and revenue for the first quarter of 2026, Bloomberg writes. The company has been able to ramp up its financial performance, although the restaurant chain's CEO Chris Kempczynski called the current operating environment challenging. Deteriorating consumer sentiment will negatively affect McDonald's results in the second quarter, the company warned.

- McDonald's revenue in the first quarter of 2026 reached $6.52 billion, up 9% year-over-year against analysts' forecast of $6.47 billion, CNBC reported, citing LSEG data.

- The company's net income for the period climbed 6% relative to the first quarter of 2025 to $1.98 billion. On a per-share basis, the figure was $2.78, up from $2.6 per share a year earlier.

- Meanwhile, diluted earnings per share (excluding restructuring charges and other factors) came in at $2.83, up 6% year-over-year (or 1% in constant currency) and above the $2.74 expected by experts.

- In the first three months of the year in the domestic market for McDonald's - in the United States - comparable sales increased by 3.9% compared to the same period last year. This was facilitated by an increase in the average check when visiting restaurants, indicates CNBC. At the same time, the recorded data was lower than the expected Wall Street 4.2%, notes Reuters. During a conference call on the reporting results, McDonald's CEO Chris Kempczynski noted that the operating environment remains challenging amid rising fuel prices. "I think it's fair to say that the macroeconomic environment is definitely not improving, and maybe even getting a little bit worse," Kempczynski said. "Higher gasoline prices are the main problem we're facing right now," he said (quoted by Reuters), adding that inflation at gas stations would "disproportionately hit low-income consumers." McDonald's, he added, expects "this pressure to continue."

- Globally, McDonald's comparable sales also increased by 3.8% compared to the first quarter of 2025, slightly short of analysts' average forecast of 3.95%, although this result was a significant improvement from a 1% decline a year earlier, Reuters said. The company said it recorded the most positive dynamics on this indicator in the markets of the U.K., Germany and Australia. The results indicate a recovery in sales after last year, when the world expected the impact on the consumer sector of new tariffs by the administration of U.S. President Donald Trump, notes Bloomberg.

Against a backdrop of sustained inflation and reduced consumer spending in the US, the fast food chain is seeking to regain its reputation as a place with affordable prices, the Financial Times (FT) points out. However, consumer pressure intensified at the end of the first quarter after the crisis in the Strait of Hormuz triggered a rise in gasoline prices. In addition, the cost of ground beef in the US hit record highs in the first three months of 2026, leading to a decline in profits for fast food restaurants.

In response, McDonald's launched a new "affordable" menu in April, including a $4 breakfast of a sausage sandwich, hash browns and coffee, the FT adds. The company said these measures, along with aggressive marketing and menu updates, help retain consumers whose financial situation is becoming increasingly unstable, The Wall Street Journal (WSJ) reports.

At the same time, the chain is promoting pop culture-inspired merchandise, CNBC points out. While McDonald's relied on affordable prices in the first three months of 2026 to attract frugal diners, it also sought to win customers through marketing and novelty items - usually at a slightly higher price point. For example, special sets timed to coincide with the release of the Super Mario Galaxy movie and the Cape Demon Huntress series were not offered at a discount, the TV station notes. And the limited-time sales of a larger version of the Big Arch burger, which launched in the U.S. in early March, was intended to fill a premium burger niche. A video of Chris Kempczynski sampling this premium sandwich went viral, the WSJ notes. Competitor Burger King responded with its own video featuring U.S. and Canada division president Tom Curtis, emphasizing the revamped Whopper.

McDonald's is now counting on new products - particularly its recently launched beverage line and its upcoming energy drink series with Red Bull - as a way to soften the blow amid deteriorating consumer sentiment, Bloomberg writes. "I think we're in great shape right now in terms of availability and value propositions," Kempczynski said during the conference call (quoted by Bloomberg). "Given the operating environment we're working in, thank goodness [some of the ideas] we've already implemented," he added.

Since the beginning of the year, McDonald's shares fell by 7%. At the premarket on Ma. 7 after the publication of the report they rose by 3% on the background of quarterly revenue and profit McDonald's exceeded analysts' forecasts, writes Reuters. However, after the opening of the main session in the U.S. securities McDonald's went into a small minus - at the time of publication lose 0.14%.

Analysts are generally optimistic about the prospects of McDonald's securities: consensus rating remains at the level of "above market" (Overweight). 21 experts recommend to buy McDonald's shares, 17 - to keep in the portfolio, and two - to sell (ratings Underweight and Sell). The target price of the restaurant chain's shares - $352.5 per share - implies their growth by 19% relative to the last closing price.

This article was AI-translated and verified by a human editor