McDonald’s Corp.‘s (NYSE:MCD) CEO Chris Kemczynski warned that a “lot of anxiety and unease” is affecting low-income consumers, speculating that rising tariffs could be a contributing factor, as the company revised its margin outlook for the year.
Check out MCD’s stock price here.
What Happened: The comments were made during the fast-food giant's second-quarter 2025 earnings call, where it reported strong overall results but noted challenges in the U.S. market.
The company adjusted its financial guidance, with CFO Ian Borden stating, “We're adjusting our full year margin target for company-operated restaurants to be around the 14.8% that we delivered in 2024, which we had previously targeted to increase slightly.”
He noted this revision was due to continued cost pressures, including the “expected impact from tariffs that are currently in place.”
The CEO painted a cautious picture of the U.S. consumer, particularly those with lower incomes. Kemczynski explained that while real wages have improved, “real incomes are down with the low-income consumer.”
He continued, “There is a lot of anxiety and unease with that low-income consumer… I think we could all speculate the reasons for that, probably tariffs and the impact that might have…” He also pointed to declining visits from this demographic, which are “down double digits versus the prior year period.”
To combat this, the company is doubling down on value and menu innovation. McDonald’s is testing a new beverage lineup and has seen early success with the reintroduction of Snack Wraps at a $2.99 price point.
The company’s international division, which saw comparable sales growth of 4%, continues to outperform, with markets like Germany and France leveraging “everyday affordable price” menus to drive market share gains.
See Also: Trump Tariffs Challenge SMCI’s AI Business, But Global Supply Chain Eases Blow After Weak Q4
Why It Matters: McDonald’s reported second-quarter adjusted earnings per share of $3.19, beating the analyst consensus estimate of $3.14. While its quarterly sales of $6.843 billion outpaced the Street view of $6.682 billion.
Revenues from franchised restaurants rose 7% year over year to $4.213 billion. Starting in September, McDonald's will introduce new cold beverages at about 500 restaurants to attract younger consumers.
Price Action: MCD stock rose 2.98% on Wednesday. It was up 5.18% year-to-date and 14.21% over the past year.
Benzinga's Edge Stock Rankings indicate that MCD maintains a strong price trend in the long term but weaker momentum over the short and medium terms. However, the stock scores well on growth rankings. Additional performance details are available here.
Price Action: The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, rose on Wednesday. The SPY was up 0.77% at $632.78, while the QQQ advanced 1.26% to $567.32, according to Benzinga Pro data.
On Thursday, the futures of the S&P 500, Nasdaq 100, and Dow Jones indices were trading higher.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
