McDonald’s (NYSE:MCD – Get Free Report) announced its quarterly earnings results on Wednesday. The fast-food giant reported $3.57 earnings per share for the quarter, beating the consensus estimate of $3.38 by $0.19, FiscalAI reports. McDonald’s had a negative return on equity of 572.06% and a net margin of 31.72%. The company had revenue of $7.16 billion during the quarter, compared to analysts’ expectations of $7.28 billion. During the same period in the previous year, the business earned $3.22 earnings per share. The firm’s quarterly revenue was up 1.1% compared to the same quarter last year.
Here are the key takeaways from McDonald’s’ conference call:
- Global comparable sales rose 1.5% and system sales grew 4% in constant currency. U.S. comparable sales fell 0.2%, but turned positive in September, with management citing improving baseline trends into October.
- Adjusted EPS was $3.57, up 11% year over year on a constant-currency basis. International comparable sales increased 1.4% in operated markets and 4.2% in developmental licensed markets, though France and China remained areas of weakness.
- McDonald’s is testing new U.S. entry-level value bundles at about 1,900 restaurants, while franchisees at roughly 4,000 more restaurants have adopted similar offers. The company plans to use test results to shape a national program targeted for early 2027; management did not provide a specific fourth-quarter U.S. sales forecast.
- Specialty beverages continued to generate incremental sales across several markets, with U.S. beverage-including checks about 50% above the full-day average and most units sold after lunch. McDonald’s plans to expand the platform in Europe and views beverages as a long-term growth opportunity.
- The company expects about 2,500 gross restaurant openings in 2026, below its prior target of 2,600, and capital spending of about $3.7 billion, at the low end of its range. Management also cited continued disruption in France and a challenging consumer environment in China.
McDonald’s Trading Up 6.5%
MCD stock traded up $17.16 during midday trading on Wednesday, hitting $280.20. The company had a trading volume of 11,513,490 shares, compared to its average volume of 5,518,136. McDonald’s has a 52 week low of $229.20 and a 52 week high of $341.75. The stock’s 50 day moving average price is $248.20 and its 200 day moving average price is $282.85. The stock has a market cap of $198.28 billion, a price-to-earnings ratio of 20.96, a PEG ratio of 3.01 and a beta of 0.42.
McDonald’s Increases Dividend
The business also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Shareholders of record on Tuesday, December 1st will be paid a $1.93 dividend. This is an increase from McDonald’s’s previous quarterly dividend of $1.86. The ex-dividend date of this dividend is Tuesday, December 1st. This represents a $7.72 dividend on an annualized basis and a yield of 2.8%. McDonald’s’s payout ratio is presently 60.44%.
Analyst Ratings Changes
A number of analysts recently issued reports on MCD shares. KeyCorp dropped their price objective on McDonald’s from $305.00 to $280.00 and set an “overweight” rating on the stock in a report on Tuesday, October 6th. Needham & Company LLC reaffirmed a “buy” rating on shares of McDonald’s in a report on Monday, September 21st. Seaport Research Partners started coverage on McDonald’s in a research report on Wednesday, September 16th. They set a “neutral” rating on the stock. Mizuho lowered their price target on shares of McDonald’s from $290.00 to $260.00 and set a “neutral” rating on the stock in a report on Friday, October 30th. Finally, Sanford C. Bernstein lowered their target price on shares of McDonald’s from $295.00 to $250.00 and set a “market perform” rating on the stock in a research note on Thursday, October 8th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-two have assigned a Buy rating, thirteen have assigned a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, McDonald’s presently has a consensus rating of “Moderate Buy” and an average price target of $293.21.
Key Headlines Impacting McDonald’s
Here are the key news stories impacting McDonald’s this week:
- Positive Sentiment: Third-quarter adjusted EPS was $3.57, above the $3.38 analyst estimate, with stronger franchised margins contributing. Global comparable sales rose 1.5%, led by international markets. McDonald’s Q3 Earnings Beat on Franchised Margins, Revenues Miss
- Positive Sentiment: Management says U.S. sales improved as the quarter progressed and is planning more affordable bundles, digital deals, and other value initiatives to attract budget-conscious customers. Investors may view these plans as a path to a domestic rebound. McDonald’s Puts Focus on Entry-Level Value to Lift Sluggish Sales
- Neutral Sentiment: Holiday drink offerings and a Pokémon Happy Meal promotion add seasonal marketing opportunities, though their impact on overall sales is uncertain. McDonald’s Pokémon Happy Meal Returns Nov. 10 With Cards
- Negative Sentiment: Revenue of $7.16 billion fell short of expectations near $7.28 billion. U.S. comparable sales declined 0.2%—the first drop in six quarters—as customers facing high living costs pulled back and restaurant traffic weakened. McDonald’s US sales decline for first time in six quarters despite value push
- Negative Sentiment: Value promotions may pressure economics and come amid reported tensions with franchisees. Separately, a judge allowed a lawsuit challenging McRib marketing to proceed, creating a potential legal and reputational overhang. McDonald’s facing lawsuit over meat in cult-favorite sandwich
McDonald’s Company Profile
McDonald’s Corporation is a global quick-service restaurant company that operates and franchises restaurants under the McDonald’s brand. Its restaurants serve a menu that includes hamburgers, cheeseburgers, chicken sandwiches, French fries, breakfast items, desserts, salads, beverages and coffee. Offerings vary by market, and many locations provide drive-thru service, delivery and digital ordering through the McDonald’s mobile app.
The company operates through a heavily franchised business model, with restaurants owned and operated by independent franchisees, affiliates and the company itself.
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