McDonald’s Finds Growth in Value Meals, Loyalty Deals and Bigger Burgers

Axios, the New York Times, CNBC, Bloomberg, the Financial Times, and the Wall Street Journal contributed to this report.

The fast-food giant posted stronger-than-expected first-quarter results on Thursday, helped by a steady stream of value offers, loyalty rewards and splashy menu launches that kept customers coming back despite higher living costs and rising fuel prices.

US same-store sales climbed 3.9% during the quarter ending March 31, a sharp turnaround from the 1% decline the chain posted a year ago. Globally, comparable sales rose 3.8%, while revenue jumped 9% to $6.52 billion.

Wall Street liked what it saw. Shares rose more than 3% in premarket trading after the company topped analysts’ forecasts for both earnings and revenue.

McDonald’s earned $1.98 billion in the quarter, or $2.78 per share, up from $1.87 billion a year earlier. Excluding restructuring charges and other items, earnings came in at $2.83 per share, ahead of expectations.

The company’s momentum comes at a strange moment for the restaurant industry. Consumers are still spending, but more carefully. Several chains, including Chipotle and Domino’s Pizza, recently warned that sales slowed after the Iran conflict pushed fuel prices higher and squeezed household budgets.

McDonald’s took a different route. It leaned hard into affordability while still nudging customers toward pricier menu items.

Its value meals and app-based loyalty deals pulled in budget-conscious diners, while limited-time products like the oversized Big Arch burger aimed at customers willing to spend a little more. Pop-culture tie-ins also helped. Meals linked to “KPop Demon Hunters” and “The Super Mario Galaxy Movie” generated buzz without relying on discounts.

The company’s loyalty program continues to become one of its biggest weapons. Across 70 markets, loyalty members generated more than $9 billion in quarterly sales and over $38 billion during the past year.

CEO Chris Kempczinski said McDonald’s “value leadership, breakthrough marketing and menu innovation” helped the company deliver strong growth despite what he described as a “challenging environment.”

Drinks are becoming a bigger focus too. McDonald’s recently rolled out refreshers and crafted sodas nationwide as chains across the industry chase younger customers looking for specialty beverages beyond the traditional soft drink lineup.

Outside the US, business also stayed solid. McDonald’s international operated markets segment – which includes countries like France, Germany and Australia – posted 3.9% same-store sales growth. In its developmental licensed markets division, Japan led the way.

For now, the burger chain appears to be threading a tricky needle: convincing inflation-weary customers they’re still getting a deal while quietly increasing how much they spend once they walk through the door.