McDonald’s Returns to Positive Comparable Sales Growth

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By Brian Nelson, CFA

On August 6, McDonald’s (MCD) reported strong second quarter results with both revenue and non-GAAP earnings per share coming in ahead of the consensus forecast. Global comparable sales increased 3.8% (versus 2.5% consensus) with broad-based growth across all segments. U.S. comparable sales growth increased 2.5% in the U.S. (versus 2.3% consensus and a -3.6% mark in the first quarter of this year), while it increased 4% in International Operated Markets (versus 1.8% consensus) and 5.6% in International Developmental Licenses Markets (versus 3.6% consensus). Consolidated revenues increased 5% (4% in constant currencies), while systemwide sales increased 8% (6% in constant currencies).

Management had the following to say about the results:

Our 6% global Systemwide sales growth this quarter is a testament to the power of compelling value, standout marketing, and menu innovation—proving again that when we stay focused on executing what matters most to our customers, we grow. Our technology investments and ability to scale digital solutions at speed will continue to elevate the McDonald’s experience for customers, crew, and our global System.

In the second quarter, McDonald’s consolidated operating income increased 11% (8% in constant currencies). Excluding charges, consolidated operating income increased 7% (4% in constant currencies). Diluted earnings per share was $3.14, an increase of 12% (10% in constant currencies). Excluding charges, diluted earnings per share was $3.19, up 7% (5% in constant currencies). McDonald’s continues to benefit from the $5 Meal Deal program, and it has brought Snack Wraps back onto its menu at an attractive $2.99 price point.

Looking to all of 2025, McDonald’s is targeting a full year adjusted operating margin in the mid-to-high 40% range, above the 46.3% adjusted operating margin in 2024. McDonald’s remains on pace to open approximately 2,200 restaurants globally this year (1,800 net). We liked McDonald’s return to positive comp growth in the second quarter, but we no longer include the idea in any newsletter portfolios.

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