McDonald's Corporation

Second-quarter system-wide sales grew 4% in constant currency, global comparable sales rose 1.3%, and adjusted EPS was $3.38, which included a $0.03 benefit from foreign currency translation. On a constant-currency basis, EPS was up 5% versus the prior year. In the second quarter, McDonald’s generated more than $4 billion in restaurant margins, and year-to-date adjusted operating margin was 46.9%; G&A was 2.2% of system-wide sales and is expected to be about 2.2% for the full year. By segment, U.S. comparable sales rose 0.8%, International Operated Markets rose 1.5%, and International Developmental Licensed Markets rose 1.9%. For guidance, management now expects about $0.15 of FX tailwind to full-year 2026 adjusted EPS, down from a prior $0.20 to $0.30 range, and expects to reach 50,000 restaurants globally in 2028 rather than 2027, while remaining on track to open about 2,600 gross restaurants in 2026.

Chris Kempczinski framed the quarter as a story of strong long-term strategy execution globally, but a U.S. execution problem in the near term. He emphasized that Accelerating the Arches has worked, with major gains in sales, operating income, loyalty, delivery, drive-thru and development, while positioning McDonald’s for a digital-first future. He was constructive and urgent in tone, saying the U.S. issues are fixable, McDonald’s will not get beaten on value, and McDonald’s > NEXT is designed to improve taste, quality, hospitality and simplicity across the system.

Ian Borden focused on the financial impact of weaker U.S. execution, noting that about 2/3 of the traffic shortfall versus expectations came from value execution issues, with the rest largely tied to the FIFA campaign underperforming expectations. He highlighted more than $4 billion in restaurant margins, 46.9% year-to-date adjusted operating margin, and G&A at 2.2% of system-wide sales, while saying full-year G&A should stay around 2.2%. On capital allocation and development, he said McDonald’s remains disciplined, expects incremental company-owned restaurant divestitures to continue, now targets 50,000 restaurants in 2028, and still plans about 2,600 gross openings this year.

Analysts pressed management on whether U.S. value is really fixed, why EDAP execution was inconsistent, how fast the U.S. issues can be repaired, and whether customer satisfaction and operator quality indicate deeper store-level problems. Management said base pricing, meal deals and EVMs are in good shape, but the EDAP menu suffered from inconsistent execution and weak awareness, and the company is already restoring digital offers, reallocating marketing to Extra Value Meals, and simplifying operations. They also said the U.S. customer experience can improve, but survey data should be viewed cautiously, and they are always trying to place restaurants with the best operators.