McDonald's (MCD) — Q2 2026 Earnings Preview
Key Factors to Watch for Q2 2026
| Factor | What to Watch / Why It Matters |
|---|---|
| Revenue Growth | Consensus: $7,155M (+7% YoY). Q1 2026 revenue was $6,466M (+9% YoY). Q2 is lapping a strong Q2 2025 (+5% YoY). |
| Comparable Sales (Comp Sales) | Q1 2026: +3.8% global, +3.9% U.S. Guidance and commentary indicate Q2 comps will decelerate vs. Q1 due to tough April lap. |
| U.S. Segment Performance | Q1 2026: +3.9% comp sales. Management expects Q2 U.S. comps to decelerate from Q1 due to tough prior-year comparison (Minecraft campaign). |
| International Segments | IOM and IDL both posted solid Q1 2026 comp sales (+3.9% and +3.4%). Q2 expected to decelerate sequentially, but management expects share gains to continue. |
| Operating Margin | FY 2025: 46.9%. Q1 2026: 46%. FY 2026 guidance: mid- to high 40% range, with expansion from 2025. |
| EPS | Consensus: $3.35 for Q2 2026 (+7% YoY). Q1 2026: $2.78 (+7% YoY). |
| Franchisee/Company Margin | U.S. company-operated margins flagged as "not acceptable" in Q1; management is focused on improvement. |
| Value Platform Evolution | McValue 2.0 (under $3 menu, $4 breakfast deal) launched in April. Early results in line with expectations. |
| Menu Innovation | New beverage platform (McCafe), chicken and beef LTOs, and marketing tie-ins (FIFA, KPop Demon Hunters) rolling out. |
| Macro/Consumer Sentiment | Management expects continued pressure on low-income consumers and heightened anxiety due to gas prices and inflation. |
| Capital Allocation | CapEx guided to $3.7–$3.9B for FY 2026, focused on new unit growth. |
Summary and Conclusions
- Q2 2026 is lapping a strong Q2 2025: Q2 2025 saw +5% revenue growth and +3.8% global comp sales, with a particularly strong April driven by the Minecraft campaign. Management has flagged April 2026 as a tough comp, with both U.S. and IOM segments running slightly negative comps for the month.
- Sequential deceleration expected in Q2 comps: Both U.S. and international segments are expected to see lower comp sales growth in Q2 vs. Q1, but management expects comp sales to accelerate on a two-year stack basis.
- Underlying momentum remains solid: Despite the tough lap, management is confident in the business setup, citing strong value positioning (McValue 2.0), menu innovation (notably beverages), and robust marketing (FIFA, KPop Demon Hunters).
- Margin focus: U.S. company-operated margins were called out as "not acceptable" in Q1. Management is actively addressing this and reviewing the franchisee vs. company ownership mix.
- Macro headwinds persist: Consumer sentiment, especially among low-income cohorts, remains pressured by inflation and rising gas prices. Management expects these pressures to continue.
- Guidance reaffirmed: FY 2026 guidance for operating margin (mid- to high 40% range), G&A (2.2% of systemwide sales), CapEx ($3.7–$3.9B), and net income to free cash flow conversion (low to mid-80%) is unchanged.
Quarterly Financial Snapshot — Actuals and Consensus
Quarterly Results and Consensus (Revenue, Net Income, EPS)
| Quarter | Revenue ($M) | YoY Growth | Net Income ($M) | EPS (GAAP) | Consensus Revenue ($M) | Consensus EPS ($) |
|---|---|---|---|---|---|---|
| Q2 2026E | 7,155 | +7%* | 2,372* | 3.35* | 7,155 | 3.35 |
| Q1 2026 | 6,466 | +9% | 1,955 | 2.74 | ||
| Q4 2025 | 7,009 | +10% | 2,164 | 3.03 | ||
| Q3 2025 | 7,078 | +3% | 2,278 | 3.18 | ||
| Q2 2025 | 6,843 | +5% | 2,253 | 3.14 |
*Consensus for Q2 2026; actuals for prior quarters.
Comparable Sales Trends (Reported)
| Quarter | Global Comp Sales | U.S. Comp Sales | IOM Comp Sales | IDL Comp Sales |
|---|---|---|---|---|
| Q1 2026 | +3.8% | +3.9% | +3.9% | +3.4% |
| Q4 2025 | +5.7% | +6.8% | +5.2% | +4.5% |
| Q3 2025 | +3.6% | +2.4% | +4.3% | +4.7% |
| Q2 2025 | +3.8% | +2.5% | +4.0% | +5.6% |
Guidance and Management Commentary
FY 2026 Guidance (as of Q1 2026)
| Metric | Guidance / Target | Notes |
|---|---|---|
| Operating Margin | Mid- to high 40% range, expanding from 46.9% (2025) | Reaffirmed in Q1 2026 |
| G&A as % of Systemwide Sales | ~2.2% | Ongoing investments in tech, digital, GBS |
| CapEx | $3.7–$3.9B | Majority for new unit openings in U.S. and IOM |
| Net Income to FCF Conversion | Low to mid-80% | In line with 84% in 2025 |
| Interest Expense | +4% to +6% YoY | Due to higher average interest rates |
