McDonald’s delivered higher profit and systemwide sales in the third quarter, helped by international markets, franchise margins and other operating income. The slight decline in US comparable sales remains the clearest test of whether its value push can restore guest traffic.
- Global systemwide sales up 4% to more than US$38 billion
- US comparable sales declined 0.2% while international markets grew
- GAAP diluted earnings per share rose 10% to US$3.51
- Quarterly dividend increased 4% to US$1.93 per share
- About 2,100 net restaurant additions targeted for 2026
McDonald’s Corporation (NYSE:MCD) increased third-quarter net income by 9% to US$2.486 billion, but the result came with a familiar weakness: US comparable sales fell 0.2%. Global systemwide sales rose 4% to more than US$38 billion, while international markets supplied most of the sales momentum and helped push diluted earnings per share 10% higher to US$3.51.
The sales mix matters. Comparable sales increased 1.4% in International Operated Markets and 4.2% in International Developmental Licensed Markets, taking the company-wide increase to 1.5%. Germany and Australia led the operated-market performance, while Japan helped the licensed-market result; France and China were weaker contributors.
US Value Push Faces a Guest Count Test
McDonald’s said negative comparable guest counts in the US were largely offset by higher average checks. Chief executive Chris Kempczinski said the company was encouraged by improvement as the quarter progressed after its intervention on value. “We’re focused on building from here, strengthening the business today and investing in the next chapter of growth,” he said, according to the release (NYSE:MCD).
That leaves an unresolved question beneath the headline profit growth: whether pricing and product mix can continue to compensate for softer traffic. The filing does not provide a market-consensus comparison, so it cannot establish whether the sales or earnings figures exceeded expectations.
Franchise Economics Lift Operating Income
Revenue increased 1% to US$7.157 billion, while GAAP operating income rose 7% to US$3.595 billion. On a non-GAAP basis excluding net charges, operating income increased 8% to US$3.651 billion and diluted earnings per share rose 11% to US$3.57. The company reported US$56 million of pre-tax charges in the quarter, primarily tied to its Accelerating the Organization restructuring programme, compared with US$39 million a year earlier.
Franchised restaurant margins represented about 90% of restaurant margin dollars and rose 3% to US$3.8 billion. Other operating income also improved, including higher gains on restaurant sales and stronger equity earnings from China, where McDonald’s said restaurant operating performance improved. Company-owned US restaurant margins, however, fell 16% to US$75 million, reflecting ongoing inflationary cost pressures.
Dividend Rises as Expansion Continues
The board declared a 4% increase in the quarterly dividend to US$1.93 per share, payable in December. McDonald’s also repurchased 1.9 million shares for US$519 million during the quarter, bringing nine-month repurchases to 6.2 million shares, or US$1.8 billion.
Management expects about US$3.7 billion of capital expenditure in 2026 and approximately 2,100 net restaurant additions, with a target of 50,000 global units by the end of 2028. The system had 46,554 restaurants at September 30, up 1,955 from a year earlier, including a particularly large increase in International Developmental Licensed Markets.
Restructuring Costs Run Through 2027
The expansion plan is paired with a continuing internal overhaul. McDonald’s expects restructuring charges related to Accelerating the Organization to continue through its anticipated completion in 2027, as it modernises operating processes and technology capabilities. The company also points to AI-enabled tools, including ArchIQ, as part of its effort to improve restaurant efficiency, although the filing cautions that these investments may not deliver their intended benefits.
For now, the numbers show a profitable global system with strong franchise economics and improving international demand. The sharper issue is whether the US value response can turn a higher average check into sustainably higher guest counts before the next phase of expansion adds more fixed investment and execution demands.
Bottom Line?
International growth and franchise margins are carrying the quarter, but the next proof point is whether US value initiatives can produce genuine traffic growth rather than simply larger checks.
Questions in the middle?
- Can McDonald’s convert its US value intervention into positive comparable guest counts in coming quarters?
- Will the planned restaurant additions generate sufficient sales and cash returns as capital spending rises to about US$3.7 billion?
- How large will the remaining restructuring costs be before Accelerating the Organization is completed in 2027?