McDonald’s (MCD) Stock: $5 Meal Deal Powers Earnings Blowout

TLDR

• McDonald’s delivered Q4 earnings of $3.12 per share on $7.01 billion revenue, beating Wall Street forecasts of $3.04 per share and $6.84 billion
• U.S. comparable sales surged 6.8% while global comparable sales climbed 5.7%, powered by $5 meal deals and promotional campaigns
• The fast-food chain targets 50,000 global restaurants by late 2027, expanding from current 43,477 locations
• CEO confirms affordability push is working as traffic improves and value perception strengthens among customers
• Stock declined 1% after hours despite earnings beat as investors digested full-year guidance and expansion plans

McDonald’s crushed fourth quarter earnings expectations. The company reported adjusted earnings of $3.12 per share on revenue of $7.01 billion.

Wall Street analysts had projected earnings of $3.04 per share on revenue of $6.84 billion. The burger chain exceeded both metrics handily.

Global comparable sales rose 5.7% in the quarter. U.S. comparable sales jumped 6.8%, marking a strong performance in the company’s largest market.

McDonald’s Corporation, MCD

CEO Chris Kempczinski credited the company’s focus on customer feedback. The value-driven approach improved traffic and strengthened affordability scores.

Global systemwide sales increased 11% during the quarter ended December. The results cap a year of strategic repositioning around value pricing.

Affordability Campaign Delivers Growth

McDonald’s launched its affordability push in 2024 with a $5 meal deal. The company worked closely with franchisees to reduce combo meal prices throughout last year.

The strategy is resonating with budget-conscious consumers. Lower-income customers remain under pressure but McDonald’s is capturing more of their spending.

Franchisees invested their own profits into the pricing initiative. McDonald’s agreed to subsidize operators who lost money on the discounted offerings.

The fourth quarter featured successful promotional campaigns. A Grinch-themed holiday meal sold out in stores across the country.

The company also revived its popular Monopoly game in October. These limited-time offers helped drive customer visits during the period.

Expansion Plans and Menu Innovation

McDonald’s is preparing for aggressive growth. The company aims to operate 50,000 restaurants worldwide by the end of 2027.

That represents an expansion of more than 6,500 locations from the current 43,477 restaurants. CFO Ian Borden said the company plans to accelerate development beyond 2025 levels.

Menu innovation remains a priority for 2026. McDonald’s is testing new burgers and beverages across multiple markets.

Energy drinks featuring Red Bull performed well during test runs. The company plans to launch energy drinks, specialty sodas and fruity refreshers in U.S. locations this year.

Kempczinski addressed the growing use of GLP-1 weight-loss drugs. He noted McDonald’s protein-rich menu positions the chain well as adoption increases.

Fourth quarter revenue climbed 10% to $7.01 billion. Profit rose 7% to $2.16 billion for the period.

For the full year, global comparable sales increased 3.1%. U.S. comparable sales gained 2.1% while total revenue grew 4%.

The stock slipped approximately 1% in after-hours trading. Shares initially rallied following the earnings release but reversed course later in the session.

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