McDonald’s CEO Flags Double-Digit Drop In Low-Income Traffic Across Industry: But Retail Turns Bullish

CEO Chris Kempczinski said that reengaging the low-income consumer is critical, as they typically visit restaurants more frequently than middle and high-income consumers.

McDonald’s (MCD) CEO Chris Kempczinski said on Wednesday that overall quick-service-restaurant traffic in the U. S. remained challenging as visits across the industry by low-income consumers once again declined by double digits versus the prior year period.

“Reengaging the low-income consumer is critical, as they typically visit our restaurants more frequently than middle and high-income consumers,” Kempczinski said on a post-earnings call.

He added that the bifurcated consumer base is why the fast-food chain remains cautious about the overall near-term health of the U. S. consumer.

Retail sentiment on McDonald’s improved to ‘bullish’ from ‘neutral’ territory, with chatter ‘high’ levels, according to data from Stocktwits data.

Shares of McDonald’s were up 3% after the fast-food chain beat second-quarter revenue and profit estimates.

The retail user message count on the stock surged 84% in the last 24 hours, heading into the quarterly results.

McDonald’s second-quarter revenue of $6.84 billion, beating Wall Street estimates of $6.70 billion, according to data compiled by Fiscal AI. Its earnings per share of $3.19 topped analysts' expectations of $3.15.

“The $5 meal deal continues to resonate with consumers as we recently celebrated the one-year anniversary of the program,” Kempczinski said.

“We've also continued to see incrementality from our McValue platform, which also includes our buy one, add one for a dollar deal, which launched at the beginning of this year,” he added.

A user on Stocktwits noted that “impressive performance internationally” made up for the weakness in the U.S.

McDonald’s stock has risen over 6% so far this year and jumped 14.2% in the last 12 months.

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