McDonald’s Sales Growth Slows as U.S. Traffic Turns Negative
Second-quarter revenue increased 4% to $7.10 billion as growth moderated across McDonald’s major markets.
McDonald’s Corporation (MCD), the restaurant chain, reported that global comparable-sales growth slowed to 1.3% in the second quarter from 3.8% in the first quarter and 5.7% in the fourth quarter. Growth also trailed the 3.8% recorded a year earlier.
The deceleration extended beyond comparable sales. Global systemwide-sales growth slowed to 5% from 11% in each of the previous two quarters, while International Developmental Licensed Markets grew 8% compared with 2% in the U.S..
Revenue rose 4% to $7.10 billion, or 2% in constant currencies, after increasing 9% in the first quarter. Diluted earnings rose 6% to $3.32 a share, slightly below the prior quarter’s 7% reported growth, though constant-currency EPS growth improved to 5% from 2%.
U.S. comparable sales increased 0.8%, down from 3.9% in the first quarter and 2.5% a year earlier. Higher average checks and favorable product mix supported sales, while comparable guest counts turned negative after both checks and traffic had grown in the fourth quarter.
Comparable-sales growth in International Operated Markets slowed to 1.5% from 3.9% in the first quarter, with France weighing on the result. International Developmental Licensed Markets growth eased to 1.9% from 3.4%, as negative comparable sales in China offset growth led by Japan.
Operating income rose 3%, down from 12% growth in the first quarter. Franchised restaurant margins increased 4% to $3.71 billion, while U.S. company-operated margins fell 6% amid inflationary cost pressure.
Selling, general and administrative expense increased 17%, mainly because of higher employee costs and the company’s owner-operator convention. Restructuring charges rose to $52 million, or $0.06 a share, and work under its Accelerating the Organization initiative will continue through its expected completion in 2027.
Trailing-12-month sales to loyalty members surpassed $40 billion, rising more than 20%, while 90-day active loyalty users reached nearly 220 million. User growth slowed to 13% from 19% at year-end.
McDonald’s repurchased 3.0 million shares for $858 million during the quarter, bringing first-half repurchases to $1.3 billion. Diluted shares outstanding declined 1%, providing support to earnings as sales and operating-income growth moderated.