McDonald’s growth beats estimates as value strategy pays off

Diners at the golden arches also spent more per visit in the U.S., the company said, citing “successful marketing promotions.” Photo by Matt Rourke/AP Photo/Postmedia files

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Sales from established U.S. restaurants jumped 6.8 per cent in the period from a year ago when foot traffic was dented by an E. coli outbreak, ahead of expectations and the highest since 2023. Earnings, excluding one-time items, also outpaced the average of estimates compiled by Bloomberg, as did comparable sales at the company’s two international divisions.

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The shares rose two per cent at 4:04 p.m. in extended trading in New York. The stock has advanced nearly six per cent this year, outpacing the gain of the S&P 500 Index over the same period.

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McDonald’s priority in recent quarters has been to regain its status as an affordable dining-out option after prices surged coming out of the pandemic. The fourth-quarter results suggest those efforts, which have included more affordable menu items and value meals priced as low as US$5, are paying off and allowing the burger chain to outperform competitors.

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The focus on affordability helped to improve traffic in the fourth quarter, chief executive Chris Kempczinski said in the company’s statement Wednesday. Diners also spent more per visit in the U.S., the company said, citing “successful marketing promotions.” During the quarter, the company brought back its popular Monopoly game and launched a Grinch-themed kids meal.

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Investors may question the cost of the efforts, however. A pre-tax charge of US$80 million, or nine cents a share, was related to restructuring charges as McDonald’s looks “to modernize ways of working” under its latest strategic plan. Operating margin, a measure of profitability, missed Wall Street’s expectations and declined from the previous quarter.

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Even so, the results suggest that McDonald’s is gaining market share as consumers change their spending habits in response to higher costs.

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Restaurant Brands International Inc., which owns Burger King, is scheduled to report results on Thursday morning, while Wendy’s Co. will release earnings the following day.

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Earlier this month, McDonald’s competitor Yum! Brands Inc. posted better-than-expected sales, largely due to strength at Taco Bell, which is popular for its buzzy, low-cost menu items. In the fast-casual category, Chipotle Mexican Grill Inc. said its underlying business was performing well early in 2026 before a winter storm disrupted traffic across multiple states. The burrito chain offered a downbeat view for the full year.

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