McDonald's and Starbucks struggle, affecting other chains like Texas Roadhouse

From CNBC: 2025-05-01 14:47:00

The CNBC Investing Club with Jim Cramer releases the Homestretch every weekday, providing an actionable afternoon update for the last hour of Wall Street trading. On May 1st, the market rallied, with the S & P 500 up after a volatile April. Meta Platforms and Microsoft reported better-than-expected quarterly results, easing fears of Trump’s tariffs impacting AI trade.

McDonald’s reported lackluster quarterly earnings, with the steepest U.S. same-store sales decline since the early days of the Covid pandemic. CEO Chris Kempczinski cited concerns over Trump’s tariffs leading to higher prices and “heightened anxiety” over consumer health. This could impact other chains like Texas Roadhouse and Starbucks, as consumer spending softens.

Starbucks reported dismal earnings, but CEO Brian Niccol’s turnaround track record still makes it a buy recommendation. Texas Roadhouse has some protection from tariffs due to its domestic revenues, but commodity inflation could affect its financials over time. Both companies face potential impact from changing consumer habits.

Quarterly earnings continue with Apple, Amazon, Airbnb, MicroStrategy, DuPont, Eaton, Exxon Mobil, Chevron, and Cigna Group posting results. Investors await the monthly employment report on Friday after weaker-than-expected hiring in April. CNBC Investing Club subscribers receive trade alerts from Jim Cramer before he makes any moves in the portfolio.



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