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McDonalds released its earnings report for the first quarter of 2025 early this morning. According to the report, U.S. comparable sales decreased by 3.6% from the previous year, primarily driven by reduced guest counts. This is the fast food giant’s largest U.S. sales drop since the second quarter of 2020, when U.S. sales plunged 8.7% during the height of the COVID-19 pandemic. ‘Grappling with uncertainty’ The fast food retailer reported that U.S. store revenue dipped to $5.96 billion, below a Bloomberg consensus estimate of $6.12 billion cited by Yahoo Finance. In the earnings report, McDonald’s CEO Chris Kempczinski noted that “Consumers today are grappling with uncertainty.” Chicago-based McDonald’s said adjusted earnings per share were $2.67. The earnings report also indicated that global sales fell 1.0%, with the most notable decline in sales in the U.K. McDonald’s shares (NYSE: MCD) were down 1.53% in early-afternoon trading on Thursday following the report. The stock is up 7.71% year to date. Fast food embracing value meals amid consumer caution Consumers appear to be tightening their spending due to economic uncertainty, likely not helped by President Trump’s broad tariffs and erratic trade policies, which have made people anxiousness about increased costs and a possible recession. In this morning’s earnings call, Kempczinski warned, were not immune to the volatility in the industry or the pressures that our consumers are facing. McDonald’s menu prices have notably risen along with inflation in recent years, leading to customer backlash. More recently, however, the fast food retailer has attempted to increase customer traffic by releasing new menu items and promoting value-focused deals. Recent discount deals include the McValue menu, which features buy one, add one for $1 items, and $5 Meal Deals. Other fast-food chains have made similar moves to boost sales. Meanwhile, the burger giant plans to continue to offer meal deals like this, according to McDonald’s CFO Ian Borden. “While we may adjust our current McValue offerings over time,” Borden said on the earnings call, “for the remainder of 2025, we’ll continue to include everyday value meal deals starting at $5 given how the current $5 meal deal in particular has resonated with customers.”
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E-Commerce
Kohls has terminated its new CEO Ashley Buchanan after an investigation determined that he directed the retailer to engage in vendor transactions that involved undisclosed conflicts of interest. Kohls named Chairman Michael Bender as interim CEO, effective immediately. In connection with the appointment, Bender will step down as a member of the boards audit, compensation and nominating and environmental, social and governance committee, according to the retailer’s regulatory filing. The news comes nearly four months after Buchanan, who had been previously the CEO of arts and crafts chain Michaels, took over the job on January 15. Buchanans appointment marks the third CEO for Kohls in three years as the department store struggles to reverse sluggish sales. Kohl’s said Thursday that Buchanans firing is unrelated to its performance, financial reporting, results of operations and did not involve any of its other employees. Kohls will conduct a search for a permanent CEO and said it will name a new chair in due course. The company couldn’t be immediately be reached for comment. Buchanan didn’t immediately return a message sent to his LinkedIn account. According to the Securities and Exchange Commission filing, Buchanan’s termination follows a probe conducted by outside counsel and overseen by the board’s audit committee. It found Buchanan had directed that Kohl’s conduct business with a vendor founded by an individual with whom Buchanan has a personal relationship on highly unusual terms favorable to the vendor and that he also caused Kohl’s to enter into a multimillion-dollar consulting agreement with the same individual who was a part of the consulting team. It also found that in neither case did Buchanan disclose this relationship as required under Kohl’s code of ethics. In connection with his termination and in accordance with the terms of his equity award agreements, Buchanan will forfeit all equity awards he received from the company, including the recruitment awards made as of January 15, according to the filing. Buchanan will also be required to reimburse Kohls for a pro rata portion of his signing incentive in the amount of $2.5 million, according to the documents. As a result of Buchanans termination, the board has determined to withdraw his nomination for election as a director of the company at the company’s annual shareholders’ meeting to be held on May 14. Buchanan had succeeded Tom Kingsbury, who stayed on as an adviser and is retaining his position on Kohls board until his retirement next month. Kingsbury served as Kohls interim CEO in December 2022 and was named its permanent leader in February 2023. The firing comes at a time when Kohl’s, which operates 1,600 stores across the country, is wrestling with sluggish sales. Its middle-income shoppers have pulled back on discretionary spending in the face of still-high prices for necessities. It’s also faced stiff competition from Walmart and Amazon, which have been improving their fashion offerings at affordable prices. And like other retailers, it is confronting uncertainty surrounding President Donald Trump‘s expansive tariffs. On Thursday, Kohl’s offered a preliminary look at sales and profits for the current quarter that showed continued weakness, though the expected results are on track to beat Wall Street estimates. It said that it expects to report a decline in comparable salesthose coming from established physical stores and online channelsin the range of 4.3% to 4%, and a loss of 24 cents to 20 cents per share for the fiscal first quarter. Analysts expected earnings per share loss of 54 cents and a drop in comparable sales of 6.4%, according to FactSet. It expects to report final fiscal first-quarter results on May 29. Shares of the company, based in Menomonee Falls, Wisconsin, rose nearly 9% in late morning trading. Michelle Chapman and Anne D’Innocenzio, AP business writers
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E-Commerce
For the second time in recent months, the Food and Drug Administration is bringing back some recently fired employees, including staffers who handle travel bookings for safety inspectors. More than 20 of the agencys roughly 60 travel staff will be reinstated, according to two FDA staffers notified of the plan this week, who spoke on condition of anonymity to discuss confidential agency matters. Food scientists who test samples for bacteria and study potentially harmful chemicals also have been told they will get their jobs back, but have yet to receive any official confirmation. The same uncertainty hangs over employees who process agency records for release to lawyers, companies and journalists under the Freedom of Information Act. About 100 of those staffers were recently eliminated, according to an agency official with direct knowledge of the situation. But in recent days the FDA has missed multiple court-ordered deadlines to produce documents, which could result in hefty fines. That’s prompted plans to bring back a significant number of those staffers. The apparent reversals are the latest examples of the haphazard approach to agency cuts that have shrunk FDAs workforce by an estimated 20%, or about 3,500 jobs, in addition to an unspecified number of retirements, voluntary buyouts and resignations. In February, the FDA laid off about 700 provisional employees, including food and medical device reviewers, only to rehire many of them within days after pushback from industry, Congress and other parties. The Department of Health and Human Services hasn’t detailed exactly which positions or programs were cut in the mass layoffs. FDA Commissioner Marty Makary has repeatedly said that no FDA scientists were fired as part of the reductions. But at least two dozen food scientists who worked in a San Francisco testing laboratory and a Chicago research center were let go in March. An HHS spokesperson suggested the apparent mix-up was due to the fractured, outdated HR infrastructure we inherited from the Biden administration and are now actively overhauling. The spokesperson did not respond to specific questions about which employees are being reinstated but said the administration will streamline operations and fix the broken systems left to us. About 15 scientists working in FDAs Division of Food Processing Science and Technology in Chicago were told last week they be will reinstated, according to a staffer who spoke on condition of anonymity to discuss confidential agency matters. But a week later there has been no written confirmation and the scientists have not returned to the office. The groups research includes studying ways to prevent harmful bacteria from growing on produce and preventing the spread of microplastics and other particles from food packaging. I hope Commissioner Makary continues to assess these ill-informed cuts and works to bring back impacted employees expeditiously, said Susan Mayne of Yale University, the FDAs former food director. His legacy as commissioner is on the line. With more than 15,000 employees remaining across various U.S. and foreign offices, the FDAs core responsibilities are reviewing new drugs, medical products and food ingredients as well as inspecting thousands of factories. Makary has said no inspectors or medical reviewers were fired as part of the recent reductions. But current and former FDA officials note that those frontline employees are often supported by teams of administrative staff. FDA inspectors, for example, have long relied on travel bookers to coordinate trips to India and other countries that often involve visa permissions, security measures, ground transportation, tech support, translation services and other logistics. Inspectors can spend up to half the year traveling, a grueling workload that makes recruiting and retaining staff a challenge. For a brief period last month, inspectors were told they would be booking their own travel. The FDA set up a hotline to assist with making the arrangements. Then, agency leaders developed a plan to hire an outside contractor to perform the work. On Monday, staffers were informed that about a third of the fired staff who performed the work would be returning. The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institutes Science and Educational Media Group. The AP is solely responsible for all content. Matthew Perrone, AP health writer AP reporter JoNel Aleccia contributed to this report.
Category:
E-Commerce
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