McDonald's Q1 net profit grew by 6%, but under the shadow of high oil prices, US same-store sales growth fell short of expectations | Earnings Report Insights
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McDonald's overall performance in the first quarter of 2026 exceeded Wall Street expectations. Larger burger products and multi-tier value menus in the U.S. market drove higher average order value, but the same-store sales growth in the U.S. did not meet analysts' expectations. Consumers, pressured by rising oil and food prices, became more conservative in spending, highlighting the fragility of current demand recovery.
The company’s total revenue for the first quarter was $6.517 billion, exceeding analysts’ average estimate of $6.47 billion; adjusted earnings per share were $2.83, higher than the market expectation of $2.74. Boosted by the positive results, McDonald’s share price rose about 3.6% in New York pre-market trading, but this year to date is still down about 7% overall.
U.S. same-store sales growth was 3.9%, below the analyst estimate of 4.2%. Global comparable sales grew 3.8%, a significant improvement from last year’s 1% decline, but still slightly below market expectations of 3.95%. CEO Chris Kempczinski stated that despite the overall beat in quarterly results, the current operating environment remains "challenging."
Chain restaurants like Wingstop and Domino’s recently reported slowing quarterly sales, citing the impact of oil price surges triggered by the Iran war on consumer spending. Analysts noted that low-income consumers increasingly prefer individual product purchases rather than full-set meal deals.
Bigger Burgers Lift Order Value, Store Traffic Fluctuates
McDonald’s stated that larger portion products help boost U.S. market performance. The "Big Arch" burger, launched this quarter, is priced higher than standard products, driving up average order value, with U.S. comparable sales growth mainly driven by higher order value.
However, according to Placer.ai data, U.S. store traffic was highly volatile throughout the quarter: January's same-store visits fell 1.3% due to snowstorms; February rebounded 3.8% with pent-up demand released; in March, amid lukewarm reaction to new products and oil prices continuing to erode household budgets, the increase narrowed to 1.2%. McDonald’s had previously warned that stormy weather in the first quarter could drag down performance.
Expanded Value Menu Balances Savings and Premium Consumption
To attract price-sensitive consumers, McDonald’s continues to enhance its multi-tier value system. The company recently adjusted the U.S. value menu, launching several items under $3 (including Sausage McMuffin) and a $4 breakfast combo, and expanded the McValue platform to the $3 and $4 price segments in April.
Meanwhile, the company targets customers still willing to spend with joint products tied to pop culture. This quarter, a Happy Meal with a mini Crocs keychain and a limited-time green mint shake were launched, with continued focus on high-growth beverage categories, introducing specialty drinks like blackberry passionfruit lemonade.
Comparable sales in international company-operated markets grew 3.9%, with all markets recording positive growth, especially strong performance in the UK, Germany, and Australia. Comparable sales in international franchise markets rose 3.4%, led by Japan, with growth across all major regions.
Overall, global systemwide sales grew 11% (6% at constant exchange rates), surpassing $34 billion.
Improved Profitability, Expanded Contribution from Loyalty Program
First quarter consolidated operating profit rose 12% (6% at constant exchange rates), reaching $2.953 billion; net profit was $1.983 billion, up 6% year-on-year; diluted earnings per share under GAAP was $2.78. The results include approximately $47 million in pre-tax restructuring costs related to the company’s "accelerated organizational change" initiative.
For its loyalty program, McDonald’s has launched a points system in 70 markets globally, with systemwide member sales exceeding $9 billion this quarter, and cumulative over the past 12 months surpassing $38 billion. Kempczinski stated that leadership in value, breakthrough marketing, and menu innovation are the core drivers for McDonald’s continual strong performance in a challenging environment.
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