McDonald's Corporation

What they do

McDonald's franchises and operates quick-service restaurants offering a locally relevant menu. Approximately 95% of its 46,028 restaurants were franchised as of June 30, 2026. The company's revenue comes from company-operated restaurant sales, franchise fees (rent and royalties), and other fees for technology and brand licensing. Its reporting segments are the U.S., International Operated Markets, and International Developmental Licensed Markets & Corporate.

Revenue drivers

• U.S. segment — Largest market, generated positive comparable sales of 0.8% in Q2 2026, driven by check growth and favorable mix, offset by negative guest counts.
• International Operated Markets — Comparable sales increased 1.5% in Q2 2026, led by Germany, Australia, and the U.K., partly offset by France.
• International Developmental Licensed Markets — Comparable sales increased 1.9% in Q2 2026, led by Japan, with all regions positive except China, which had negative comparable sales.
• Loyalty and digital — Systemwide sales to loyalty members reached $40 billion over trailing twelve months, up over 20%, with 220 million 90-day active users, contributing to global systemwide sales of $37 billion in Q2 2026.

Recent performance

For Q2 2026 (quarter ended June 30, 2026), consolidated revenues increased 4% to $7.10 billion (2% in constant currencies). Global comparable sales increased 1.3%, with all segments positive. Net income rose 5% to $2.36 billion, and diluted EPS increased 6% to $3.32 ($3.38 excluding restructuring charges). For the six months ended June 30, 2026, revenues increased 6% to $13.62 billion and diluted EPS was $6.10. Annual 2025 revenue was $26.89 billion and diluted EPS was $11.95.

Strategy

Management emphasizes the franchising model, which generates stable and predictable revenue streams and cash flow. The company is investing in technology and digital platforms, reflected in other revenues from franchisee fees. It is executing an internal effort to modernize ways of working, called 'Accelerating the Organization,' which incurred restructuring charges. In Q2 2026, the company appointed Skye Anderson as President of McDonald's USA to focus on improving performance in the largest market. The company aims to drive comparable sales growth through product mix and guest count initiatives.

Risks

• U.S. guest count declines — Negative comparable guest counts in the U.S. were partly offset by check growth, indicating potential softening in customer traffic.
• China underperformance — China reported negative comparable sales in International Developmental Licensed Markets, partly offsetting strength in other regions.
• Franchisee dependence — With ~95% of restaurants franchised, the company's revenue depends on franchisee sales and their financial health.
• Restructuring execution — The 'Accelerating the Organization' initiative has resulted in pre-tax charges, and may not achieve intended efficiency benefits.

Outlook

Management expects continued growth through its 'playbook' of initiatives, though it notes the need to 'raise the bar' in the U.S. The company is benefiting from loyalty program expansion, with 70 loyalty markets and strong member sales growth. Comparable sales growth is expected to continue, but foreign currency translation may dampen reported results. No specific numerical outlook was provided in the latest filings.