McDonald's US Sales Plummet While Anti-American Sentiment Rise Abroad

McDonald's Corporation $MCD ( ▼ 0.6% ) has reported its steepest drop in U.S. sales since the pandemic era, while simultaneously flagging concerns about rising anti-American sentiment in international markets.

The fast-food giant's latest financial results, released on May 1, 2025, reveal significant challenges as consumers tighten spending amid economic uncertainty^1,^2.

The Sales Slump

McDonald's U.S. same-store sales fell by 3.6% in the first quarter of 2025, marking the most substantial decline since the second quarter of 2020, when sales plunged 8.7% during COVID-19 lockdowns^9.

The drop significantly exceeded analyst expectations, who had forecast a more modest 1.7% decrease^1.

This sales decline contributed to an overall revenue decrease of 3%, with total quarterly revenue reaching $5.96 billion, well below the Bloomberg consensus estimate of $6.12 billion^9,^7.

Q1 2025 Key Performance Metrics
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Global comparable sales: -1.0%
U.S. comparable sales: -3.6%
Total revenue: $5.96 billion (-3%)
Adjusted earnings per share: $2.67
Net income: $1.87 billion (-3%)

The sales drop wasn't limited to the United States.

The company's International Operated Markets segment saw a 1.0% decline in same-store sales, with particular weakness in the United Kingdom^11.

Only the International Developmental Licensed Markets segment showed growth, with same-store sales increasing by 3.5%, driven by stronger performance in Japan, Australia, and the Middle East^10,^2.

The Consumer Divide

Perhaps most telling in McDonald's earnings report is the stark divide between consumer segments.

Traffic from low-income consumers declined by nearly double digits compared to the previous quarter, while middle-income consumer visits fell almost as much^6,^7.

This consumer behavior illustrates what McDonald's executives described as a divided U.S. economy, where lower and middle-income households are particularly affected by inflation's cumulative impact and growing concerns about the economic outlook^6,^7.

Many consumers are choosing to skip breakfast entirely or eat at home to save money^8.

The Global Picture and Anti-American Sentiment

While domestic sales suffered, McDonald's is also navigating a complex international landscape.

The company has reported an uptick in anti-American sentiment, particularly in Northern Europe and Canada, amid an emerging global trade war^3,^8.

McDonald's internal research indicates a significant rise in negative perceptions of America in several markets, with survey data showing an "8-10 point" increase in anti-American sentiment^3.

Company monitoring has found that more individuals in various markets are indicating plans to reduce purchases of American brands^1.

Despite these concerning trends, McDonald's maintains that while general anti-American sentiment has increased, it hasn't yet negatively impacted their business performance abroad.

This resilience stands in contrast to previous challenges, such as the controversy surrounding American policy in the Middle East that affected Western brands last year^3.

Economic Context

The broader economic environment provides critical context for McDonald's struggles.

The U.S. economy contracted at an annual rate of 0.3% during the first quarter of 2025, marking the first quarterly downturn since 2022^2,^4.

Economic Factors Impacting McDonald's Performance
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• U.S. economy contracted 0.3% in Q1 2025
• First quarterly downturn since 2022
• Trump administration's aggressive tariff policies
• Rising inflation expectations
• Growing recession concerns
• Global trade war tensions
• Declining tourism from Europe and Canada

These challenges come just over two months into Donald Trump's presidency, with many businesses and consumers reportedly confused by a series of tariff announcements^2,^9.

These policies have intensified financial pressures on lower-income consumers in both the U.S. and Europe, potentially leading to increased costs and disrupted supply chains^4.

The turbulence has inflation expectations at their highest levels since the 1980s, with increasing concerns about a potential recession by year's end^7.

McDonald's Response Strategy

In response to these challenges, McDonald's is doubling down on value offerings to attract price-sensitive customers.

The company has committed to continuing its $5 meal deal promotion through the remainder of 2025, citing its strong resonance with customers^6,^9.

Despite the current challenges, McDonald's has maintained its full-year financial projections^1,^11.

The company also highlighted that customer satisfaction scores are at an all-time high in the U.S., suggesting that quality perception remains strong even as visit frequency declines^6.

Industry-Wide Trend

McDonald's isn't alone in facing these headwinds.

Several major restaurant chains have reported disappointing financial results as consumers tighten discretionary spending^1.

Brands like Chipotle $CMG ( ▲ 1.75% ) , Pizza Hut $YUM ( ▼ 0.42% ) , KFC, Burger King $QSR ( ▲ 1.13% ) , and Starbucks $SBUX ( ▲ 2.52% ) have all experienced slowing or declining sales this quarter^1,^6.

Restaurant Chains Reporting Sales Challenges in Q1 2025
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• Chipotle Mexican Grill (broke years-long growth streak)
• Pizza Hut
• KFC
• Starbucks
• Domino's Pizza

Industry experts note that dining out is often one of the first expenses consumers reduce when feeling financial pressure.

This trend appears to be accelerating, with many restaurant executives pointing to particular weakness among lower-income clientele.

Market Reaction and Analyst Perspectives

Following the earnings announcement, McDonald's shares dipped by approximately 1.6% during early trading.

However, the stock was still up about 7% year-to-date prior to the announcement, outperforming an S&P subindex tracking restaurants.

Analysts have mixed views on the company's prospects.

Bernstein analyst Danilo Gargiulo noted that the results were surprising despite previously highlighted consumer weakness affecting McDonald's core lower-income customer base^7.

Meanwhile, Citi analyst Jon Tower suggested the fourth quarter of 2024 might have represented a "low in recent memory for the company," implying potential for recovery^7.

According to financial data, McDonald's maintains a "GOOD" overall financial health score, though current trading levels suggest the stock may be slightly overvalued based on Fair Value assessments^13.

Looking Ahead

Looking forward, McDonald's has characterized Q1 as "always going to be the toughest quarter of the year" and expects momentum to build as 2025 progresses^6.

The company remains confident in its ability to navigate challenging market conditions and gain market share, citing its "70-year legacy of innovation, leadership, and proven agility".

However, McDonald's executives remain cautious about the overall health of the consumer and acknowledge they're "not immune to the volatility in the industry or the pressures that consumers are facing"^9.

This balanced perspective suggests a realistic assessment of the challenges ahead while maintaining confidence in the company's strategic direction.

For investors, McDonald's performance serves as an important economic indicator.

As one of the world's largest and most geographically diverse restaurant operators, its sales trends often reflect broader economic currents and consumer sentiment.

The coming quarters will reveal whether this sales decline represents a temporary setback or the beginning of a more prolonged economic downturn affecting the restaurant industry as a whole.