McDonald’s reported its worst domestic quarterly sales since 2020 as the economy responds to President Donald Trump’s tariff agenda.
On Thursday, McDonald’s CEO and Chairman Chris Kempczinski released data on the fast food company’s performance during its first quarter, which ended March 31. The franchise experienced its steepest decline in traffic in the United States since sales plunged by 8.7% during the COVID-19 pandemic, he said, suggesting that the 3.6% drop during the latest quarter was due to consumers “grappling with uncertainty.”
McDonald’s global sales also dropped by 1% during the first quarter. Kempczinski explained that “geopolitical tensions added to the economic uncertainty and dampened consumer sentiment more than we expected.”
The CEO added that his company is navigating the “toughest of market conditions.” His words come as the stock market has taken blows in response to Trump’s sweeping tariff agenda.
Trump has refused to back away from his economic plan, as tariffs brought in over $16.5 billion in revenue last month, according to the Treasury. The president has conceded that while there could be temporary turmoil in the markets, he believes the economy will surge long-term as he expects his tariffs to result in a wealth of better trade deals, incentivize companies to invest in the U.S., and bring jobs outsourced to cheaper foreign labor back to the mainland. However, lawmakers on both sides of the aisle have warned that the strategy could hurt the economy and raise prices for consumers.
Kempczinski expressed optimism that McDonald’s will “outperform” its competitors but warned that the chain is not “immune to the volatility in the industry or the pressures that our consumers are facing.”
The news follows announcements from other chains, such as Chipotle, posting similar declines in sales. Meanwhile, federal data released earlier this week revealed that the U.S. contracted at a 0.3% annual rate in the first quarter of 2025, marking the first contraction in three years.
McDonald’s announcement of a 3.6% sales drop in the first quarter marked the second consecutive quarter of declines — U.S. sales decreased by 1.4% during the last quarter of 2024. While the chain has experienced a decline in traffic from low-income customers for months, the latest data showed that middle-income consumers are now also eating out less, “a clear indication that the economic pressure on traffic has broadened,” according to the company.
The company’s net income for the first quarter was $1.87 billion, a decline from $1.93 billion last year. However, McDonald’s attributed the drop in part to the fact that 2024 was a leap year, which gave the company an extra day to make money.
The chain has rolled out a number of deals designed to spur customer traffic in recent months, including a McValue menu that launched in January. The marketing tactic included an extension of the popular $5 Meal Deal and a new Buy One, Add One for $1 offer.
McDonald’s is launching new chicken strips next week, and it has also teased the return of items such as the snack wrap.
The chain is known as Trump’s favorite fast-food restaurant, even serving as a spot for a campaign appearance last fall.
The president donned an apron and served up fries during his visit, smiling broadly in front of the “Golden Arches.”
TRUMP’S MCDONALD’S VISIT HITS A NERVE
“It’s a good job, isn’t it?” Trump said to the McDonald’s employee who taught him how to work the frying station. “Not bad, right?”
“I love jobs,” he added when asked why he thought it was important for him to make the campaign stop. “I love to see good jobs.”