McDonald’s Corporation has reported its second quarter 2024 earnings, which includes declines in key metrics across the board. McDonald’s second quarter ended June 30, 2024, less than a week after the company rolled out a $5 value meal in an effort to win back cash-strapped customers who have increasingly felt fast food prices no longer provide the value they once did.

Here are the key metrics from McDonald’s Q2 2024:

• Total revenue: $6.49 billion (relatively flat from the quarter a year earlier)
• Operating income: $2.92 billion (down 6% from the quarter a year earlier)
• Net income: $2.02 billion (down 12% the quarter a year earlier)
• Diluted earnings per share: $2.80 (down 11% the quarter a year earlier)

As CNBC notes, McDonald’s same-store sales also declined 1%, the first time same-store sales companywide have fallen since the heyday of the pandemic back in Q4 2020. U.S.-based sales decreased 0.7%. To put that U.S. number into greater context, in McDonald’s Q2 2023, a year ago, U.S. store sales were up 10.3%.

Consumers struggle to see the value in McDonald’s

So why did McDonald’s have such a bad quarter? The reason is the same one that has been dogging the company since the beginning of the year: Consumers are cash-strapped, thanks to inflationary pressures that have persisted for more than a year now. Whereas fast food once was seen as a source of value due to its relatively low prices, increases in popular McDonald’s menu items over the years have now raised prices to a point where many consumers find it more cost-effective to choose groceries over a stop at their favorite fast food joint.

As Fast Company reported last month, since 2019, prices of some of McDonald’s most popular food items have increased by at least 20%. This includes the price of its iconic Big Mac, which is up 21% since 2019 to $5.29. Its popular Quarter Pounder with cheese is also up 20% in the same timeframe to $5.39.

It hasn’t helped McDonald’s that social media is awash in consumers posting about how high fast food prices have gotten, further fueling the narrative that fast food isn’t the deal it used to be.

The return of the value meal

To help combat this, in late June, McDonald’s rolled out the $5 value meal, which includes a McDouble or McChicken sandwich, four-piece chicken nuggets, small fries, and a soft drink. However, given that the $5 value meal launched with only a few days left in June, the promotion was never going to have a meaningful impact on the company’s Q2.

Investors will now be keenly eyeing how the promotion performs during the company’s current Q3. As for the company’s Q2, in a statement, CEO Chris Kempczinski said, “We are confident that Accelerating the Arches is the right playbook for our business, and as consumers are more discriminating with their spend, we are focused on the outstanding execution of delivering reliable, everyday value and accelerating strategic growth drivers like chicken and loyalty.”

“Accelerating the Arches” is the name of McDonald’s growth strategy. It includes three main pillars: maximizing the company’s marketing; committing to its core burger, chicken, and coffee products; and leveraging its app, delivery services, and drive-thru to drive sales.

After announcing its Q2 2024 results, McDonald’s stock price (ticker: MCD) is currently trading up about half a percent to around $253.19 in premarket trading as of the time of this writing. The company’s stock price has been down around 15% in the year to date.