A month has gone by since the last earnings report for McDonald's (MCD Quick QuoteMCD - Free Report) . Shares have lost about 4.8% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is McDonald's due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for McDonald's Corporation before we dive into how investors and analysts have reacted as of late.

McDonald's Q2 Earnings Beat on Franchised Margins, Sales Miss

McDonald's 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.

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%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

At this time, McDonald's has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, McDonald's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

McDonald's is part of the Zacks Retail - Restaurants industry. Over the past month, Cheesecake Factory (CAKE Quick QuoteCAKE - Free Report) , a stock from the same industry, has gained 3.1%. The company reported its results for the quarter ended June 2026 more than a month ago.

Cheesecake Factory reported revenues of $1.03 billion in the last reported quarter, representing a year-over-year change of +7.7%. EPS of $1.44 for the same period compares with $1.16 a year ago.

For the current quarter, Cheesecake Factory is expected to post earnings of $0.87 per share, indicating a change of +27.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +5.3% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Cheesecake Factory. Also, the stock has a VGM Score of A.