McDonald’s reported mixed third-quarter results on Wednesday, with U.S. restaurant traffic declining and same-store sales falling slightly, though the performance still exceeded Wall Street expectations.
The fast-food giant reported a 0.2% decrease in same-store sales at U.S. restaurants open at least 13 months, outperforming the 0.5% decline that analysts had anticipated, according to StreetAccount. The company’s CEO Chris Kempczinski noted in a statement that the company was “encouraged by improvement as the quarter progressed following our intervention on value.”
CFO Ian Borden said on the earnings call that same-store sales returned to growth in September after falling in July and August, though he clarified he was not predicting the U.S. would perform better in the fourth quarter.
To address the sales decline, McDonald’s has focused on promoting value offerings, including its Extra Value Meals and regional and national promotions on its mobile app. Kempczinski noted in August that the U.S. business was underperforming on execution, particularly regarding value offerings. The company has increasingly relied on discounts over the past two years to attract budget-conscious consumers.
Looking ahead, McDonald’s is testing two new value menu concepts designed to appeal to customers and franchisees. One features mix-and-match bundles, while the other includes set combinations of menu items. According to executives on the earnings call, whichever offering resonates most strongly will be rolled out across the U.S. in early 2027.
Overall company results beat adjusted earnings expectations, with adjusted earnings per share of $3.57 versus the $3.38 analysts expected. However, revenue of $7.16 billion missed expectations of $7.29 billion. Net income rose to $2.49 billion, or $3.51 per share, from $2.28 billion, or $3.18 per share, a year earlier.
International markets provided stronger performance. Global same-store sales rose 1.5%, topping analyst expectations of 1.3%. McDonald’s international developmental licensed markets division, which includes Japan and China, reported 4.2% same-store sales growth, significantly outpacing the 2.1% Wall Street forecast. The international operated division, including markets like Australia and Germany, reported 1.4% growth but underperformed expectations of 2.1%.
France emerged as a weakness for the company. Borden said the company is facing both a softer economy and short-term disruptions from student protests. Franchisees in France recently voted on a strategy to reverse the business decline.
Key facts
- McDonald’s U.S. same-store sales fell 0.2%, beating the expected 0.5% decline
- The company is testing two new value menu formats, rolling out the most successful in early 2027
- Same-store sales returned to growth in September after declining in July and August
- Global same-store sales rose 1.5%, led by strong growth in Japan and China at 4.2%
- Adjusted earnings per share of $3.57 beat expectations of $3.38