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Can MCD's International Markets Drive Growth Amid Consumer Pressure?
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Key Takeaways
McDonald's IOM posted 1.5% comparable sales growth, led by Germany, Australia and the U.K.
IDL grew 1.9%, with Japan delivering its 10th straight quarter of positive guest-count growth.
Management expects IOM and IDL comparable sales growth to accelerate sequentially in the third quarter.
McDonald’s Corporation (MCD - Free Report) is seeing its international markets provide a relatively steady source of growth despite softer consumer demand across several regions. International Operated Markets (“IOM”) reported 1.5% comparable sales growth in the second quarter of 2026, with Germany, Australia and the United Kingdom leading the performance. After slightly negative comparable sales in April, McDonald’s saw IOM results improve in May and June, moving closer to normalized levels.
Value offerings and menu innovation remain important in maintaining demand. McDonald’s benefited from Every Day Affordable Price menus and meal deals across several IOM markets, while chicken-focused products helped Australia and Germany gain chicken share. In Germany, the company launched a specialty beverage platform in May, adding another avenue for sales growth.
International Developmental Licensed Markets (“IDL”) delivered 1.9% comparable sales growth. McDonald’s Japan business was a key contributor, recording its 10th consecutive quarter of positive comparable guest-count growth. The market’s loyalty platform, launched less than a year ago, has nearly 20 million 90-day active users, with higher visit frequency supporting demand.
The international performance is taking place against a softer consumer environment. QSR traffic across several large markets remained flat to negative, while McDonald’s operations in China tempered IDL growth as the macro and consumer environment remained challenging. France also fell short of McDonald’s expectations, although renewed meal deals and value offerings are being used to improve consumer response.
Management expects comparable sales growth in both IOM and IDL to accelerate sequentially in the third quarter. The outlook provides McDonald’s with a potential source of additional growth, even as consumer conditions remain uneven across international markets.
McDonald’s Competitive Landscape
As international markets remain an important part of growth strategies, Starbucks Corporation (SBUX - Free Report) and The Wendy’s Company (WEN - Free Report) provide useful comparisons for McDonald’s.
Starbucks delivered a stronger international performance in the third-quarter fiscal 2026. International company-operated comparable sales increased 5.7%, supported by continued strength in Japan and the United Kingdom. The broader international business also recorded its sixth consecutive quarter of positive system-wide comparable sales across 90 markets. Starbucks is placing greater emphasis on international expansion, with new coffeehouse prototypes developed and tested globally to support faster unit growth. Management expects international markets to remain a meaningful contributor to unit growth through fiscal 2027.
Wendy’s international business presents a more uneven picture. International systemwide sales increased 3.4% in the second-quarter fiscal 2026, supported by new restaurant development. However, international same-restaurant sales declined 2.3%, mainly due to a challenging consumer and competitive environment in Canada. Excluding Canada, international sales increased 8.6%, with positive same-restaurant sales. Wendy’s also opened 27 international restaurants during the quarter, indicating that new unit development remains an important source of international growth.
MCD’s Price Performance, Valuation & Estimates
McDonald’s shares have lost 21.3% in the past six months, underperforming the Zacks Retail - Restaurants industry, the broader Retail and Wholesale sector and the S&P 500 index.
Price Performance
Image Source: Zacks Investment Research
On a forward 12-month basis, MCD trades at a P/E of 19.45, down from the industry’s 22.64.
MCD P/E (F12M)
Image Source: Zacks Investment Research
MCD’s earnings estimates for 2026 have moved up over the past 30 days, while estimates for 2027 have been revised downward. Despite these mixed revisions, the latest estimates project year-over-year earnings growth of 5.5% in 2026 and 7.9% in 2027, pointing to continued momentum over the next two years.
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Can MCD's International Markets Drive Growth Amid Consumer Pressure?
Key Takeaways
McDonald’s Corporation (MCD - Free Report) is seeing its international markets provide a relatively steady source of growth despite softer consumer demand across several regions. International Operated Markets (“IOM”) reported 1.5% comparable sales growth in the second quarter of 2026, with Germany, Australia and the United Kingdom leading the performance. After slightly negative comparable sales in April, McDonald’s saw IOM results improve in May and June, moving closer to normalized levels.
Value offerings and menu innovation remain important in maintaining demand. McDonald’s benefited from Every Day Affordable Price menus and meal deals across several IOM markets, while chicken-focused products helped Australia and Germany gain chicken share. In Germany, the company launched a specialty beverage platform in May, adding another avenue for sales growth.
International Developmental Licensed Markets (“IDL”) delivered 1.9% comparable sales growth. McDonald’s Japan business was a key contributor, recording its 10th consecutive quarter of positive comparable guest-count growth. The market’s loyalty platform, launched less than a year ago, has nearly 20 million 90-day active users, with higher visit frequency supporting demand.
The international performance is taking place against a softer consumer environment. QSR traffic across several large markets remained flat to negative, while McDonald’s operations in China tempered IDL growth as the macro and consumer environment remained challenging. France also fell short of McDonald’s expectations, although renewed meal deals and value offerings are being used to improve consumer response.
Management expects comparable sales growth in both IOM and IDL to accelerate sequentially in the third quarter. The outlook provides McDonald’s with a potential source of additional growth, even as consumer conditions remain uneven across international markets.
McDonald’s Competitive Landscape
As international markets remain an important part of growth strategies, Starbucks Corporation (SBUX - Free Report) and The Wendy’s Company (WEN - Free Report) provide useful comparisons for McDonald’s.
Starbucks delivered a stronger international performance in the third-quarter fiscal 2026. International company-operated comparable sales increased 5.7%, supported by continued strength in Japan and the United Kingdom. The broader international business also recorded its sixth consecutive quarter of positive system-wide comparable sales across 90 markets. Starbucks is placing greater emphasis on international expansion, with new coffeehouse prototypes developed and tested globally to support faster unit growth. Management expects international markets to remain a meaningful contributor to unit growth through fiscal 2027.
Wendy’s international business presents a more uneven picture. International systemwide sales increased 3.4% in the second-quarter fiscal 2026, supported by new restaurant development. However, international same-restaurant sales declined 2.3%, mainly due to a challenging consumer and competitive environment in Canada. Excluding Canada, international sales increased 8.6%, with positive same-restaurant sales. Wendy’s also opened 27 international restaurants during the quarter, indicating that new unit development remains an important source of international growth.
MCD’s Price Performance, Valuation & Estimates
McDonald’s shares have lost 21.3% in the past six months, underperforming the Zacks Retail - Restaurants industry, the broader Retail and Wholesale sector and the S&P 500 index.
Price Performance
Image Source: Zacks Investment Research
On a forward 12-month basis, MCD trades at a P/E of 19.45, down from the industry’s 22.64.
MCD P/E (F12M)
Image Source: Zacks Investment Research
MCD’s earnings estimates for 2026 have moved up over the past 30 days, while estimates for 2027 have been revised downward. Despite these mixed revisions, the latest estimates project year-over-year earnings growth of 5.5% in 2026 and 7.9% in 2027, pointing to continued momentum over the next two years.
Image Source: Zacks Investment Research
MCD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.