McDonald’s posts Q1 beat on value meal

Today’s headlines

What’s happening: Shares of McDonald’s Corp edged lower on Thursday after the company released its first-quarter results.

What happened: The fast-food giant reported stronger-than-expected sales and earnings as consumers turned to value meals amid inflation.

McDonald’s stock came under pressure as management warned of a weak start to the second quarter.

How were the results: The Chicago, Illinois-based company reported high single-digit sales growth for its first quarter.

• Quarterly sales rose 9% year-over-year to $6.517 billion, which topped consensus estimates of $6.466 billion.
• Adjusted earnings came in at $2.83 per share, beating Wall Street expectations of $2.74 per share.

Why it matters: Global comparable sales at McDonald’s rose 3.8% in the latest quarter, missing market expectations of 3.95%.

US comparable sales grew 3.9%, driven by increased customer spending per visit, while gains in international markets were driven by strength in the UK, Australia, Germany and Japan.

Revenues from franchised restaurants surged 9% to $4.01 billion, while sales at company-owned restaurants rose 9% to $2.32 billion.

McDonald’s sales growth was driven by its value meals and loyalty perks, with consumer budgets being impacted by persistent economic pressure. Menu innovations, like the launch of the new Big Arch burger in March, also helped performance.

CEO Chris Kempczinski warned, however, that the surge in gas prices due to the Middle East conflict and inflation could weigh on household budgets of low‑income consumers and impact sales in the second quarter. He added that these pressures “are going to continue.”

Higher operating costs have also impacted cash flows at franchisees and exerted pressure on the company’s margins. Margins at the US company‑owned and operated restaurants contracted 25% year-over-year to $59 million.

Several US restaurant chains, including Papa John’s, Shake Shack and Domino’s, have also recorded weaker sales growth in the quarter due to the impact of the war with Iran.

How shares responded: McDonald’s shares fell 0.1% to close at $283.70 on Thursday following the release of quarterly results. The stock has lost around 7% over the past month.

What to watch: Investors will continue monitoring rising gas prices due to the US-Iran war and inflation. McDonald’s new menu additions will also be in focus.

The markets today

The Japanese yen in focus today ahead of some major economic reports

Context: The Japanese yen slipped versus the US dollar this morning as investors digested the latest economic data.

Details: Data released this morning showed that average cash earnings in Japan grew by 2.7% year-over-year in March, easing from a 3.4% rise in the previous month. The figure also came in below market estimates of 3.2%.

Japan’s S&P Global services PMI was revised lower to 51.0 in April from the preliminary reading of 51.2. The figure also below March’s 53.4. Although the latest reading signalled the thirteenth straight month of growth in services activity, it was the weakest since May 2025.

Japan’s S&P Global composite PMI also fell to 52.2 in April, from the flash estimate of 52.4 and compared to 53.0 in March.

The greenback’s safe-haven appeal rose again on renewed tensions between the US and Iran at the Strait of Hormuz. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose around 0.2% to 98.25.

The USD/JPY forex pair edged higher to 156.99, while the Nikkei 225 fell 0.36% to 62,609.62 this morning.

What to watch: Investors will continue monitoring talks between the US and Iran regarding.

Data on household spending, coincident index and leading economic index from Japan will be released on Tuesday. Household spending in Japan, which fell 1.8% year-over-year in February following a 1.0% decline in the previous month, is expected to rise by 1.3% in March. Analysts expect Japan’s leading economic index to decline to 109 in March from 113.3 in February.

Other Markets: US trading indices closed lower on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.63%, 0.38% and 0.12%, respectively.

The news shaping the markets

Russia’s Ministry of Foreign Affairs warned diplomats to evacuate Ukraine’s capital city of Kyiv to avoid a mass strike on the region. The news sent the USD/RUB pair lower in forex trading this morning.

Argentina’s industrial production grew 5.0% year-over-year in March, following an 8.6% decline in February, exerting slight pressure on the USD/ARS forex pair.

Mexico’s central bank cut its benchmark interest rate by 25 basis points to 6.50%, in-line with expectations, which sent the USD/MXN pair lower in forex trading this morning.

Chile’s trade surplus contracted to $1.9 billion in April from $2.1 billion in the year-ago period, lending support to the USD/CLP forex pair.

South Korea’s current account surplus expanded to $37.33 billion in March. Despite this being the largest monthly surplus on record, the USD/KRW pair rose in forex trading this morning.

What else to watch today

India’s foreign exchange reserves (1530 UAE Time), Mexico’s consumer confidence (1600 UAE Time), Canada’s unemployment rate (1630 UAE Time), employment change (1630 UAE Time) and average hourly wages (1630 UAE Time), US nonfarm payrolls (1630 UAE Time), unemployment rate (1630 UAE Time), Michigan consumer sentiment (1800 UAE Time), Michigan inflation expectations (1800 UAE Time), wholesale inventories (1800 UAE Time), Baker Hughes oil rig count (2100 UAE Time) and Baker Hughes total rigs count (2100 UAE Time), Russia’s foreign exchange reserves (1700 UAE Time), Brazil’s car production (1800 UAE Time) and new car registrations (1800 UAE Time), as well as Türkiye’s Treasury cash balance (1830 UAE Time).