McDonald's Corporation (MCD Quick QuoteMCD - Free Report) reported second-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same. 

McDonald's reported adjusted earnings per share (EPS) of $3.38, up 6% year over year, and beating the Zacks Consensus Estimate of $3.32 by 1.8%. Higher sales-driven franchised margins and other operating income supported the bottom line.

McDonald's Corporation Price, Consensus and EPS Surprise

McDonald's Corporation price-consensus-eps-surprise-chart | McDonald's Corporation Quote

Revenues increased 4% year over year to $7.10 billion but missed the consensus mark of $7.14 billion by 0.5%. Global comparable sales rose with positive growth across all three operating segments.

MCD Posts Positive Comparable Sales Across Segments

Global comparable sales increased 1.3% compared with 3.8% growth in the prior-year quarter. The United States recorded a 0.8% increase, driven by positive average check growth, including favorable product mix, partly offset by lower comparable guest counts.

International Operated Markets comparable sales rose 1.5%. Germany, Australia and the United Kingdom led the improvement, while France remained a drag. International Developmental Licensed Markets advanced 1.9%, supported by Japan and positive results across all geographic regions, partly offset by weakness in China.

McDonald’s Systemwide Sales Benefit From Scale

Global systemwide sales increased 5%, or 4% in constant currencies, to $37 billion. U.S. systemwide sales rose 2%, while International Operated Markets and International Developmental Licensed Markets increased 6% and 8%, respectively.

Loyalty remained an important demand driver. Across 70 loyalty markets, trailing 12-month systemwide sales to loyalty members increased more than 20% to $40 billion. The number of 90-day active loyalty users rose 13% to nearly 220 million at quarter-end.

MCD’s Q2 Revenue Growth Reflects Franchised Strength

Revenues from franchised restaurants increased 4% to $4.39 billion. U.S. franchised revenues rose 2%, International Operated Markets gained 5%, and International Developmental Licensed Markets and Corporate advanced 9%.

Sales from company-owned and operated restaurants increased 3% to $2.53 billion. U.S. sales declined 1%, while International Operated Markets rose 3%. Other revenues increased 6% to $182 million, reflecting contributions from technology-related fees and brand licensing arrangements.

McDonald’s Margins Rise Despite U.S. Cost Pressure

Franchised restaurant margins increased 4.3% to $3.71 billion and represented roughly 90% of total restaurant margin dollars. Growth reflected stronger sales across all segments and favorable currency translation in the international businesses.

Company-owned and operated restaurant margins rose 1.8% to $387 million. U.S. margins declined 6% to $91 million due primarily to ongoing inflationary cost pressures. International Operated Markets margins increased 3% to $285 million, as sales growth and currency benefits were partly offset by inflation.

MCD’s Operating Income Advances as SG&A Climbs

Operating income increased 3% to $3.34 billion, or 2% in constant currencies. Results included $52 million in pre-tax charges, primarily related to restructuring under the Accelerating the Organization initiative. Excluding current- and prior-year charges, operating income increased 4%.

Selling, general and administrative expenses increased 16.7% to $817 million. The rise primarily reflected higher employee costs, including incentive-based compensation, and expenses associated with the 2026 Worldwide Owner/Operator convention. Other operating income totaled $37 million compared with an expense of $29 million a year earlier, aided by higher gains on restaurant sales and excess properties.

MCD Maintains 2026 Expansion and Margin Outlook

McDonald’s expects net restaurant expansion to contribute about 2.5% to 2026 systemwide sales growth in constant currencies. The company continues to project a full-year operating margin in the mid-to-high 40% range and SG&A expenses of roughly 2.2% of systemwide sales.

Capital expenditures are expected between $3.7 billion and $3.9 billion. McDonald’s plans to open approximately 2,600 restaurants during 2026, generating about 2,100 net additions. Interest expense is projected to increase 4-6%, while the full-year effective tax rate is expected between 21% and 23%.

MCD’s Zacks Rank & Key Picks

MCD currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Zacks Retail-Wholesale sector have been discussed below.

Five Below, Inc. (FIVE Quick QuoteFIVE - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 70.1%, on average. FIVE stock has gained 15.1% in the year-to-date period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Five Below’s 2026 sales and EPS indicates growth of 23.9% and 36.1%, respectively, from the year-ago period’s levels.

FIGS, Inc. (FIGS Quick QuoteFIGS - Free Report) has a Zacks Rank #2 at present. The company delivered a trailing four-quarter earnings surprise of 212.5%, on average. FIGS stock has declined 4.2% in the year-to-date period.

The Zacks Consensus Estimate for FIGS’ 2026 sales and EPS indicates growth of 15.5% and 36.8%, respectively, from the prior-year levels.

Dutch Bros Inc. (BROS Quick QuoteBROS - Free Report) carries a Zacks Rank of 2 at present. The company delivered a trailing four-quarter earnings surprise of 31.6%, on average. BROS stock has risen 6.2% in the year-to-date period.

The Zacks Consensus Estimate for Dutch Bros’ 2026 sales and EPS indicates growth of 27% and 23.7%, respectively, from the prior-year levels.