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(Sharecast News) - Fast food giant McDonald's delivered mixed first-quarter results on Tuesday as restructuring costs weighed on profits.
McDonald's reported a Q1 net income of $1.93bn, or $2.66 on a per share basis, up from $1.8bn a year earlier. However, a pre-tax charge of $35.0m linked to its reorganisation efforts weighed on earnings. Excluding restructuring charges, McDonald's earned $2.70 per share.
Net sales rose 5% to $6.17bn, with global same-store sales increasing 1.9% in the quarter, falling short of estimates of 2.1% growth. US same-store sales grew of 2.5%, missing expectations of 2.6%. McDonald's said average transaction values grew due to increased menu prices but also seemingly deterred low-income customers as a result of its hiked prices.
"Consumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending, which is putting pressure on the industry," said chief executive Chris Kempczinski, who added that McDonald's now has to be "laser focused" on affordability if it wants to attract diners.
Demand in the company's international developmental licensed markets was weak, with same-store sales falling 0.2%, marking the first time since Covid-19 that one of its divisions posted a same-store sales decline. Worth noting, the segment includes its Middle East operations, which have experienced boycotts after a McDonald's Israeli licensee offered discounts to soldiers. Earlier in April, McDonald's purchased 225 restaurants operated by its Israeli franchisee.
As of 1450 BST, McDonald's shares were down 1.34% at $269.74 each.
Reporting by Iain Gilbert at Sharecast.com
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