Mcdonalds 2025 Q1 Earnings Misses Targets with Net Income Down 3%

Mcdonald's (MCD), ranking 41st by market capitalization reported its fiscal 2025 Q1 earnings on Apr 30th, 2025. McDonald's first-quarter results fell short of expectations as market challenges weighed heavily on performance. Revenue declined by 3% to $5.95 billion, missing analysts' forecast of $6.09 billion, while net income dropped 3% to $1.86 billion. Adjusted EPS of $2.67 narrowly beat projections by a penny. The company anticipates strategic investments to drive future growth, but current guidance remains modest amid economic uncertainty and consumer confidence issues.

Revenue
McDonald's reported a 4.7% revenue decrease, totaling $5.79 billion for Q1 2025, compared to $6.08 billion in Q1 2024. Franchised restaurants contributed $3.66 billion, while company-owned outlets generated $2.13 billion. Other revenue sources added $162 million, culminating in total revenues of $5.96 billion.

Earnings/Net Income
McDonald's experienced a decrease in EPS, dropping 2.4% to $2.61 in Q1 2025 from $2.68 in Q1 2024, alongside a 3.2% decline in net income to $1.87 billion. The EPS performance is modestly negative, reflecting continued profitability despite challenges.

Price Action
The stock price of McDonald's has edged up 0.90% during the latest trading day, has edged up 0.37% during the most recent full trading week, and has climbed 4.09% month-to-date.

Post Earnings Price Action Review
The earnings report metrics had a moderate impact on McDonald's stock price, as a backtest from April 30, 2020, to April 30, 2025, indicated. Revenue showed a 3-Day win rate of 53.67%, while both the 10-Day and 30-Day win rates stood at 56.06% and 56.30%, respectively, suggesting short-term gains are somewhat likely post-earnings. Net income and EPS mirrored this pattern, with the 10-Day and 30-Day win rates also at 56.06% and 56.30%. The maximum observed return was 3.63% over 30 days. Overall, all three metrics—revenue, net income, and EPS—suggest potential for modest positive gains following earnings releases, indicating opportunities for investors.

CEO Commentary
McDonald's Corporation reported first quarter results with global comparable sales decreasing 1.0%, attributed to prior year comparisons, particularly Leap Day. CEO Chris Kempczinski emphasized the company's resilience, stating, “McDonald's has a 70-year legacy of innovation, leadership, and proven agility,” which fuels confidence in navigating challenging market conditions. He acknowledged consumer uncertainty but highlighted McDonald's commitment to offering exciting new menu items and maintaining exceptional value, reinforcing the brand's strong market position.

Guidance
McDonald's anticipates continued focus on strategic investments and menu innovation to enhance customer experience and drive future growth. The company remains optimistic about its ability to gain market share despite current challenges, emphasizing its commitment to delivering value and adapting to evolving consumer preferences.

Additional News
In recent weeks, McDonald's has made strides in enhancing its digital presence, launching a new mobile platform aimed at improving customer engagement. This initiative is part of the company's ongoing efforts to modernize and streamline operations. Furthermore, McDonald's announced leadership changes, appointing a new Chief Marketing Officer to spearhead global branding strategies. The company is also exploring potential mergers and acquisitions to expand its market footprint, with discussions reportedly underway regarding possible partnerships with international food chains. These developments signal McDonald's proactive approach to maintaining its competitive edge in the fast-food industry.