McDonald’s posts steep sales decline; Jobless claims surge; Kohl’s ousts CEO

McDonald’s reported same-store U.S. sales dropped 3.6% from a year earlier in its latest quarter, marking the largest decline since the pandemic-blighted second quarter of 2020 for the world’s largest restaurant chain and a potential sign of consumer wariness amid economic uncertainties.

Same-store sales for all regions posted a smaller 1% annual fall, but the U.S. decline was the largest since the early days of the COVID pandemic for the Chicago-based operator of more than 43,000 restaurants worldwide, including over 13,000 in the U.S.

McDonald’s CEO Chris Kempczinski told analysts that overall customer traffic for the U.S. quick-service restaurant industry dropped nearly 10% from a year earlier among low-income consumers in the first quarter. Unlike a few months ago, traffic among middle-income customers fell nearly as much, “a clear indication that the economic pressure on traffic has broadened,” Kempczinski said during a Thursday earnings call.

A McDonald’s statement said the company still plans to open 2,200 locations during 2025, with $3 billion to $3.2 billion in planned capital spending.

The National Restaurant Association this week said its latest industry performance index was unchanged in March from the prior month, though there was rising pessimism among surveyed operators. A measure of six-month future expectations for sales and traffic levels fell sharply for the second straight month, “which illustrates the rising degree of uncertainty about business conditions,” the trade group said in a statement. 

Initial U.S. claims for unemployment insurance reached 241,000 for the week ended April 26, jumping by a higher-than-expected 18,000 from the prior week, the Labor Department reported Thursday. The latest available data also showed continued unemployment claims reaching 1.92 million for the week ended April 19, the highest level since mid-November 2021.

Analysts said claims numbers have begun to reflect rising economic uncertainty tied to trade tariffs and the effects of widescale cutting of the federal government workforce.

“Continued claims are more volatile week to week, but remain elevated, signaling that workers who lose their job are facing challenges in finding new employment,” Nancy Vanden Houten, lead U.S. economist for forecasting firm Oxford Economics, said in a statement Thursday.

“Claims for benefits by federal employees have receded since jumping in late February and early March,” Vanden Houten said. “However, we expect these claims to rise sharply in the months ahead as layoffs of federal workers reaccelerate.” 

Struggling retailer Kohl’s announced its second CEO changeover in less than three years, as a prominent outplacement firm reported that chief executive exits at U.S. companies reached record levels in the first quarter.

A Kohl’s statement Thursday said its executive board fired CEO Ashley Buchanan after an internal investigation found he violated company policy by “directing the company to engage in vendor transactions that involved undisclosed conflicts of interest.” Citing knowledgeable sources, The Wall Street Journal reported the alleged conflicts involved a person with whom Buchanan had a romantic relationship.

The Menomonee Falls, Wisconsin-based operator of more than 1,100 stores appointed Michael Bender, a former chief executive of Eyemart Express, as its interim CEO as it launched a search for a permanent replacement. Kohl’s has long struggled with slowing sales and profits, and this marks its second CEO changeover since late 2022, when Michelle Gass left the company to head Levi Strauss.

The Kohl’s news came as Challenger, Gray & Christmas reported this week that CEO turnovers at U.S.-based companies reached 646 in the first quarter, up 14% from the prior quarter and marking a quarterly record in more than 20 years of tracking by the outplacement firm.

Exits during the quarter were led by the government-nonprofit category at 135, though they were much lower in industries such as retail at 21, construction at 16 and real estate at 11. “We certainly continue to face economic uncertainty as tariffs, federal job and funding cuts, new regulation, and falling consumer confidence hit companies nationally,” Senior Vice President Andrew Challenger said in a statement.