McDonald's Surpassed Its Second Quarter Table Despite Challenges

McDonald's (MCD) announced on Tuesday that comparable store sales in the U.S. have exceeded estimates for two consecutive quarters as the company continues to offer value-focused deals in a challenging environment.

The company reported that comparable store sales in the U.S. increased by 2.5% compared to the same period last year, noting that this growth was driven by higher control sales. This figure is above Wall Street's expected increase of 2.2% and aligns with the 2.5% growth seen in the previous quarter, according to Bloomberg data.

Global comparable store sales rose by 3.6%, consistent with the 3.8% growth seen in the second quarter. Adjusted earnings per share were recorded at $3.22, falling short of the expected $3.32, while revenue was announced at $7.1 billion in line with forecasts.

CEO Chris Kempczinski stated in a release, "We are driving momentum by delivering value every day with affordable options, menu innovation, and impactful marketing. This keeps customers coming through our doors."

McDonald's announced that total systemwide sales, including company-operated and franchise locations, grew by 6%. Following the quarterly results, the stock rose by about 2% on Tuesday.

In the third quarter, McDonald's announced the return of the Snack Wrap and a deal with U.S. franchisees to reduce the cost of certain combo meals. As fast-food companies compete for broader value propositions, consumers are facing increased pressure on their wallets due to inflation and a weakening labor market. The company's Monopoly app returned digitally for the first time in nearly a decade, contributing to growth in app downloads and digital sales.

In the earnings call with investors, Kempczinski expressed that the chain’s U.S. consumer health is "cautious," highlighting his observation of a "two-tiered consumer base." Traffic among lower-income groups fell by nearly double digits in the third quarter, while higher-income consumers saw an almost double-digit increase.

CFO Ian Borden stated that comparable store sales in the U.S. are expected to grow faster in the fourth quarter compared to the third quarter, as this period will be compared to last year's E. coli outbreak. However, Kempczinski emphasized that they expect similar pressures on lower-income consumers in 2026. "Think about low-income consumers and the pressures they are facing... rents are at very high levels... food prices, whether in restaurants or grocery stores... childcare costs are high," he said.

According to Kempczinski, the only way for this sentiment to change is for there to be relief related to the cost of living and a perception of growth in real incomes. Wall Street remains optimistic that the company's recent moves will create a turning point in recovering consumers.

Citi analyst Jon Tower noted that the company's sales rebound is driven by "the ongoing values each day, alongside more innovation in products and consistency in the menu." McDonald's plans to add new beverages inspired by the short-lived CosMc drink concept. Borden mentioned that this launch is still in early stages, but the company is "encouraged by the response."