Fast-food chain McDonald’s (NYSE:MCD) reported results in line with analysts' expectations in Q1 CY2024, with revenue up 4.6% year on year to $6.17 billion. It made a non-GAAP profit of $2.70 per share, improving from its profit of $2.63 per share in the same quarter last year.

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"Our global comparable sales growth in the first quarter marks 13 consecutive quarters of positive comparable sales growth with 30% growth over the last 4 years," said CEO Chris Kempczinski.

Arguably one of the most iconic brands in the world, McDonald’s (NYSE:MCD) is a fast-food behemoth known for its convenience, value, and wide assortment of menu items.

Traditional Fast Food

Traditional fast-food restaurants are renowned for their speed and convenience, boasting menus filled with familiar and budget-friendly items. Their reputations for on-the-go consumption make them favored destinations for individuals and families needing a quick meal. This class of restaurants, however, is fighting the perception that their meals are unhealthy and made with inferior ingredients, a battle that's especially relevant today given the consumers increasing focus on health and wellness.

Sales Growth

McDonald's is one of the most widely recognized restaurant chains in the world and benefits from brand equity, giving it customer loyalty and more influence over purchasing decisions.

As you can see below, the company's annualized revenue growth rate of 4.3% over the last five years was weak, but to its credit, it opened new restaurants and grew sales at existing, established dining locations.

This quarter, McDonald's grew its revenue by 4.6% year on year, and its $6.17 billion in revenue was in line with Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 5.6% over the next 12 months, an acceleration from this quarter.

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Same-Store Sales

A company's same-store sales growth shows the year-on-year change in sales for its restaurants that have been open for at least a year, give or take. This is a key performance indicator because it measures organic growth and demand.

McDonald's demand has outpaced the broader restaurant sector over the last eight quarters. On average, the company has grown its same-store sales by a robust 8.8% year on year. With positive same-store sales growth amid an increasing number of restaurants, McDonald's is reaching more diners and growing sales.

In the latest quarter, McDonald's same-store sales rose 2% year on year. By the company's standards, this growth was a meaningful deceleration from the 12.6% year-on-year increase it posted 12 months ago. We'll be watching McDonald's closely to see if it can reaccelerate growth.

Key Takeaways from McDonald's Q1 Results

This quarter was a par for McDonald's. Its revenue, same-store sales growth, and EPS were in line with analysts' expectations, showing the business is holding steady. Double-clicking into its three regions, we can see that same-store sales increased 2.5% and 2.7% in the U.S. and its International Operated Markets but shrank 0.2% in its International Developmental Licensed Markets. Overall, we think this was a decent quarter. The stock is flat after reporting and currently trades at $271.18 per share.

So should you invest in McDonald's right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.