The restaurant industry’s top line in first-quarter 2026 likely benefited from steady consumer demand for convenience-driven dining, particularly across quick-service and fast-casual segments. Value meals, limited-time offers and menu innovation likely helped sustain traffic, even as consumers remained selective with discretionary spending. Digital ordering channels and delivery platforms continued to support sales growth, while loyalty programs are likely to have enhanced repeat visits. Additionally, improving mobility and a gradual normalization of workplace routines in many regions might have supported dine-in occasions, especially during weekdays.
Another key contributor to revenue growth in the quarter is likely to have been pricing. Menu prices, which were raised over the past year to offset inflation, are likely to have remained elevated, driving higher average ticket sizes. Many operators also leaned into premium offerings and combo deals to boost per-customer spending. International markets might have provided an added lift, supported by stable demand trends and improved travel activity in certain regions. Overall, a mix of stable traffic and pricing carryover is likely to have helped sustain industry-wide revenue growth in the quarter.
On the bottom line, easing commodity inflation, particularly in select food inputs, is likely to have provided some margin relief in first-quarter 2026. Restaurants also continued to focus on cost discipline through simplified menus, improved labor scheduling and greater use of technology to enhance efficiency. These measures, combined with prior pricing actions, are likely to have helped offset still-high wage costs. Larger players, in particular, might have benefited from scale efficiencies and stronger supply-chain management, supporting profitability.
That said, some pressures are likely to have remained in the quarter. Consumer spending among lower-income groups might have stayed constrained, impacting traffic in certain segments. Labor and occupancy costs are likely to have remained elevated, while increased discounting and promotional activity to drive demand might have weighed on margins for some operators.
Companies in the broader Retail-Wholesale sector, such as McDonald's Corporation MCD, Shake Shack Inc. SHAK and Papa John's International, Inc. PZZA, are set to report their first-quarter earnings on May 7.
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McDonald's is scheduled to report first-quarter 2026 before the opening bell.
The company’s first-quarter performance is likely to have benefited from continued traction in value offerings, marketing initiatives and menu innovation. In the United States, McValue and the relaunch of Extra Value Meals are likely to have aided first-quarter performance. Management noted that McValue remains the foundation of its 2026 value strategy, while Extra Value Meals continued to support value and affordability perceptions. Momentum from nationally price-pointed offerings, including the $5 Sausage McMuffin with Egg meal and the $8 two-Snack Wrap meal in January, is expected to have supported traffic in the to-be-reported quarter.
International markets are likely to have remained supportive, albeit with some moderation. Management cited solid January momentum in International Operated Markets, backed by value, menu and marketing execution. However, growth is likely to have decelerated sequentially due to weather-related pressures across several European markets. Our model predicts first-quarter revenues from total international operated markets to rise 5.8% year over year to $3 billion.
However, weather disruption is expected to have hurt first-quarter sales. Management stated that severe weather in the United States beginning in late January pressured industry traffic, affected McDonald’s traffic and led several restaurants to close or reduce hours. The company estimated the weather impact at about 100 basis points for the full quarter.
The Zacks Consensus Estimate for MCD’s first-quarter 2026 revenues is pegged at $6.49 billion, indicating growth of 8.9% from the year-ago figure. Earnings per share (EPS) are pegged at $2.75, indicating growth of 3% from $2.67 reported in the year-ago quarter.
The company has an Earnings ESP of -0.44% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
McDonald's Corporation Price and EPS Surprise
McDonald's Corporation price-eps-surprise | McDonald's Corporation Quote
Shake Shack is scheduled to report results before the opening bell.
The company’s top line is likely to have benefited from menu innovation and store openings. An emphasis on digital initiatives and licensed business bodes well. Marketing efforts aimed at increasing brand awareness are also likely to have supported sales momentum.
However, bottom-line performance is likely to have been pressured by elevated input costs, particularly in beef, alongside continued investments in marketing, digital capabilities and infrastructure. Higher labor and administrative expenses, along with potential weather-related disruptions in key regions, might have further weighed on margins despite steady revenue growth.
The Zacks Consensus Estimate for SHAK’s first-quarter 2026 revenues is pegged at $371.4 million, indicating growth of 15.8% from the year-ago figure. Earnings per share are pegged at 11 cents, indicating a decline of 21.4% from 14 cents reported in the year-ago quarter.
The company has an Earnings ESP of +19.41% and a Zacks Rank #3.
Shake Shack, Inc. Price and EPS Surprise
Shake Shack, Inc. price-eps-surprise | Shake Shack, Inc. Quote
Papa John's is scheduled to report results before the opening bell.
For first-quarter 2026, Papa John's is likely to have benefited from strong brand-building initiatives, targeted value promotions and robust digital engagement through its loyalty program. Continued product innovation and technology upgrades that improved ordering convenience are likely to have supported traffic and customer frequency. Additionally, solid international momentum and unit expansion are likely to have provided some support to overall revenues.
However, performance is likely to have been pressured by weak North America trends amid a cautious consumer environment. Elevated promotional intensity, lower transaction volumes and a shift toward value offerings are likely to have weighed on comparable sales and margins.
The Zacks Consensus Estimate for PZZA’s first-quarter 2026 revenues is pegged at $483.5 million, indicating a decline of 6.7% from the year-ago figure. Earnings per share are pegged at 40 cents, indicating growth of 11.1% from 36 cents reported in the year-ago quarter.
The company has an Earnings ESP of -10.31% and a Zacks Rank #3.
Papa John's International, Inc. Price and EPS Surprise
Papa John's International, Inc. price-eps-surprise | Papa John's International, Inc. Quote
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McDonald's Corporation (MCD): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).