McDonald’s (NYSE:MCD) Announces Quarterly Earnings Results, Beats Estimates By $0.06 EPS

McDonald’s (NYSE:MCD) announced its quarterly earnings results on Tuesday. The fast-food giant reported $3.38 earnings per share for the quarter, beating analysts’ consensus estimates of $3.32 by $0.06, FiscalAI reports. McDonald’s had a net margin of 31.62% and a negative return on equity of 442.10%. The firm had revenue of $7.10 billion for the quarter, compared to analysts’ expectations of $7.13 billion. During the same period in the previous year, the company posted $3.19 earnings per share. McDonald’s’s revenue was up 3.7% compared to the same quarter last year.

Here are the key takeaways from McDonald’s’ conference call:

• Global comparable sales increased 1.3% in the second quarter, while systemwide sales rose 4% in constant currency; international markets delivered positive growth, though China remained challenging.
• U.S. comparable sales grew only 0.8%, with July comps slightly negative, as inconsistent execution of the under-$3 value menu, reduced digital offers, operational complexity, and an underperforming FIFA campaign weighed on traffic.
• Management is responding with more national and personalized digital offers, greater marketing support for proven value products, simplified restaurant deployments, and a planned crew retraining program to improve service and hospitality.
• The new beverage platform is exceeding expectations in the U.S., Canada, and Germany, generating higher checks, strong food attachment, and additional afternoon traffic; Red Bull Energizers are expected to add further momentum.
• McDonald’s pushed its target of reaching 50,000 restaurants to 2028 from 2027 because of inflationary development costs and a pressured consumer environment, while the projected 2026 foreign-exchange EPS benefit declined to approximately $0.15.

McDonald’s Stock Up 1.8%

Shares of McDonald’s stock traded up $4.79 during trading hours on Wednesday, hitting $273.13. 1,481,037 shares of the company’s stock traded hands, compared to its average volume of 3,875,121. McDonald’s has a twelve month low of $260.96 and a twelve month high of $341.75. The company has a market cap of $194.06 billion, a PE ratio of 22.52, a PEG ratio of 2.85 and a beta of 0.41. The stock has a 50 day simple moving average of $274.32 and a 200-day simple moving average of $297.05.

McDonald’s Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, September 16th. Stockholders of record on Tuesday, September 1st will be paid a dividend of $1.86 per share. The ex-dividend date is Tuesday, September 1st. This represents a $7.44 annualized dividend and a dividend yield of 2.7%. McDonald’s’s dividend payout ratio (DPR) is currently 61.34%.

McDonald’s News Summary

Here are the key news stories impacting McDonald’s this week:

• Positive Sentiment: McDonald’s reported quarterly EPS of $3.38, above the $3.32 consensus and up from $3.19 a year earlier. Revenue increased 3.7% year over year to $7.10 billion, while stronger franchised margins helped offset the revenue shortfall. McDonald’s Q2 Earnings Beat on Franchised Margins, Sales Miss
• Positive Sentiment: Comparable sales rose across all three operating segments, with international markets and record restaurant margins providing support despite weaker domestic traffic. Management also appointed longtime executive Skye Anderson to lead nearly 14,000 U.S. restaurants, aiming to improve value, service and execution. McDonald’s names Skye Anderson as its U.S. president
• Positive Sentiment: BTIG Research reaffirmed its “buy” rating and set a $350 price target, implying substantial potential upside from recent trading levels. Wall Street’s broader analyst consensus also remains bullish. BTIG Research rating Wall Street’s Bullish Views
• Neutral Sentiment: Morgan Stanley, RBC and Baird lowered their price targets to $319, $295 and $285, respectively, while maintaining equal-weight, sector-perform or neutral ratings. The revisions still imply upside, but signal limited conviction in a near-term reacceleration. Analyst price-target updates
• Negative Sentiment: U.S. comparable sales increased only 0.8%, slowing sharply from 2.5% a year earlier and missing expectations. Management acknowledged that overly complicated value promotions, weaker digital deals and poor execution reduced visits from budget-conscious and loyal customers. McDonald’s U.S. sales disappoint
• Negative Sentiment: The U.S. slowdown prompted a leadership change and contributed to a delay in McDonald’s global expansion target: reaching 50,000 restaurants is now expected in 2028 rather than 2027. The results reinforce concerns that higher spending, rather than customer growth, is supporting sales. McDonald’s delays store expansion plans

Analysts Set New Price Targets

MCD has been the topic of a number of research reports. KeyCorp cut their target price on shares of McDonald’s from $315.00 to $305.00 and set an “overweight” rating on the stock in a research note on Wednesday. Rothschild & Co Redburn raised shares of McDonald’s from a “sell” rating to a “neutral” rating and upped their price target for the stock from $260.00 to $306.00 in a research report on Thursday, April 23rd. Barclays lowered their price target on McDonald’s from $380.00 to $350.00 and set an “overweight” rating for the company in a report on Friday, May 8th. Piper Sandler set a $286.00 price objective on McDonald’s in a research report on Tuesday. Finally, BTIG Research restated a “buy” rating and set a $350.00 price objective on shares of McDonald’s in a research note on Wednesday. Sixteen research analysts have rated the stock with a Buy rating and twelve have issued a Hold rating to the company. Based on data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $329.44.

Insider Activity

In related news, EVP Desiree Ralls-Morrison sold 2,763 shares of the stock in a transaction dated Thursday, May 28th. The stock was sold at an average price of $278.36, for a total value of $769,108.68. Following the completion of the transaction, the executive vice president owned 6,268 shares of the company’s stock, valued at approximately $1,744,760.48. This represents a 30.59% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this link. Also, insider Joseph M. Erlinger sold 5,252 shares of the firm’s stock in a transaction that occurred on Wednesday, June 10th. The shares were sold at an average price of $284.32, for a total value of $1,493,248.64. Following the sale, the insider owned 7,734 shares of the company’s stock, valued at approximately $2,198,930.88. This trade represents a 40.44% decrease in their position. The SEC filing for this sale provides additional information. In the last quarter, insiders sold 8,348 shares of company stock worth $2,355,634. Insiders own 0.26% of the company’s stock.

Institutional Trading of McDonald’s

A number of hedge funds and other institutional investors have recently made changes to their positions in the stock. State Street Corp grew its holdings in McDonald’s by 0.6% during the 3rd quarter. State Street Corp now owns 35,024,857 shares of the fast-food giant’s stock worth $10,643,704,000 after acquiring an additional 196,505 shares in the last quarter. Price T Rowe Associates Inc. MD raised its stake in shares of McDonald’s by 3.0% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 9,474,749 shares of the fast-food giant’s stock valued at $2,895,768,000 after purchasing an additional 277,617 shares in the last quarter. Charles Schwab Investment Management Inc. lifted its position in shares of McDonald’s by 0.6% during the fourth quarter. Charles Schwab Investment Management Inc. now owns 5,455,057 shares of the fast-food giant’s stock worth $1,667,232,000 after purchasing an additional 34,484 shares during the last quarter. Amundi lifted its position in shares of McDonald’s by 5.9% during the fourth quarter. Amundi now owns 4,571,831 shares of the fast-food giant’s stock worth $1,397,289,000 after purchasing an additional 253,060 shares during the last quarter. Finally, Viking Global Investors LP grew its stake in McDonald’s by 7.2% in the fourth quarter. Viking Global Investors LP now owns 3,619,215 shares of the fast-food giant’s stock worth $1,106,141,000 after purchasing an additional 244,340 shares in the last quarter. Institutional investors own 70.29% of the company’s stock.

McDonald’s Company Profile

McDonald’s Corporation (NYSE: MCD) is a global quick-service restaurant company best known for its hamburgers, French fries and breakfast offerings. The company develops, operates and franchises a system of restaurants that sell a range of food and beverage items, including signature products such as the Big Mac, Quarter Pounder, Chicken McNuggets, McCafé coffee beverages and a variety of salads, desserts and seasonal menu items. McDonald’s serves customers through company-operated restaurants and franchised locations, and it supports sales via dine-in, drive-thru, digital ordering platforms and third-party delivery partnerships.

Founded in 1940 by brothers Richard and Maurice McDonald as a single San Bernardino, California restaurant, the business was transformed into a franchising model after Ray Kroc joined in the mid-1950s and led the brand’s national and international expansion.