McDonald’s delivered steady performance in Q1, beating Wall Street’s revenue and profit expectations amid a persistently challenging consumer environment. Management credited disciplined execution of its three-part strategy: emphasizing value offerings, driving marketing campaigns, and introducing menu innovation. CEO Chris Kempczinski specifically highlighted the U.S. relaunch of Extra Value Meals and a new under-$3 menu as instrumental in regaining share among value-oriented customers. Marketing partnerships, such as with Netflix’s KPop Demon Hunters, and new beverage category launches globally, also contributed to broad-based sales gains.
Is now the time to buy MCD? Find out in our full research report (it’s free for active Edge members).
McDonald's (MCD) Q1 CY2026 Highlights:
- Revenue: $6.52 billion vs analyst estimates of $6.47 billion (9.4% year-on-year growth, 0.7% beat)
- Adjusted EPS: $2.83 vs analyst estimates of $2.74 (3.1% beat)
- Adjusted EBITDA: $3.57 billion vs analyst estimates of $3.44 billion (54.7% margin, 3.6% beat)
- Operating Margin: 45.3%, in line with the same quarter last year
- Locations: 45,699 at quarter end, up from 43,756 in the same quarter last year
- Same-Store Sales rose 3.8% year on year (-1% in the same quarter last year)
- Market Capitalization: $195.9 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From McDonald's’s Q1 Earnings Call
- Dennis Geiger (UBS) asked about the U.S. sales trajectory for the remainder of the year, with CEO Chris Kempczinski emphasizing confidence in the marketing calendar and McValue program, but noting uncertainty due to worsening consumer sentiment.
- Brian Harbour (Morgan Stanley) probed the frequency and rationale behind value menu changes. Kempczinski explained that having both meal deals and entry-level pricing is critical, and highlighted recent improvements in value perception scores.
- John Ivankoe (JPMorgan) questioned refranchising and margin strategy, with CFO Ian Borden acknowledging company-operated margin challenges and outlining criteria for optimizing ownership to maximize returns.
- David Tarantino (Baird) inquired about franchisee profitability pressures amid inflation. Kempczinski and Borden noted stable cash flow last year but flagged heightened concern this year, particularly given beef inflation and energy costs.
- Lauren Silberman (Deutsche Bank) asked about the impact of rising gas prices and Q2 momentum. Borden clarified that April sales declines were due to tough comparisons, while Kempczinski said higher fuel costs are likely to keep lower-income traffic under pressure.
Catalysts in Upcoming Quarters
Our team will be watching (1) the uptake and performance of new beverage platforms and menu innovations, (2) how effectively McDonald’s maintains value leadership and traffic among lower-income consumers amid ongoing inflation and fuel cost headwinds, and (3) signs of margin recovery in U.S. company-operated restaurants. The impact of the FIFA World Cup activation and adjustments to the development pipeline will also be important milestones.
McDonald's currently trades at $275.70, down from $284.10 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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