McDonald's reports first sales decline in 18 months

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McDonald's U.S. sales decline

Value menus fail to bring customers back

Over the past two years, McDonald's has been trying to attract budget-conscious customers through discounts. The company introduced menu items priced below $3, as well as a $4 breakfast meal.

However, the rising cost of living is forcing Americans to look for more affordable dining options. Some customers are choosing competing fast-food chains, buying prepared meals from stores, or cooking at home more often.

McDonald's CEO Chris Kempczinski said the company saw an improvement toward the end of the quarter after strengthening its value offerings. Earlier, CFO Ian Border had warned investors that U.S. sales could decline for the quarter, although a return to growth was expected in September.

Meanwhile, competitors have reported stronger results. Burger King's parent company, Restaurant Brands International, exceeded analysts' sales expectations thanks to discounts and promotional campaigns. Taco Bell, owned by Yum Brands, also reported a return to growth following food safety-related issues.

McDonald's boosts profit by cutting costs

Despite weaker sales in the U.S., McDonald's global comparable sales increased by 1.5% in the third quarter, in line with analysts' expectations.

Adjusted earnings reached $3.57 per share, up from $3.22 a year earlier. The result also exceeded Wall Street's forecast of $3.38 per share. One of the main factors was a roughly 4% reduction in operating costs and expenses.

The company continues to implement its NEXT strategy, introduced in June 2026. The program includes simplifying operations, modernizing restaurant designs, and increasing investment in employee training.

McDonald's aims to improve restaurant-level operating efficiency by 2.5 percentage points. According to the company's estimates, this could generate approximately $100,000 in additional annual cash flow for the average U.S. restaurant.

McDonald's has so far managed to maintain profit growth through cost controls, despite declining restaurant traffic. However, its future performance will depend on whether affordable menus and the updated strategy can bring back American consumers who are increasingly cutting spending on dining out.

What's happening with McDonald's stock?

McDonald's shares (MCD) have fallen 13.8% since the beginning of 2026 and lost 8.6% over the past six months. The stock declined 3.1% over three months, although it recovered by 13% over the past month. At the close of the previous trading session, shares were priced at $263, down 11.6% from a year earlier.

Following the release of its quarterly earnings report on November 4, McDonald's shares rose 2.7% in premarket trading to $270. Investors responded positively to the company's better-than-expected earnings despite declining U.S. sales. However, the sustainability of the recovery will depend on whether McDonald's can bring customers back to its restaurants and improve its financial performance in the coming quarters.

As a reminder, McDonald's is expanding its advertising business through its U.S. media network.

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