Growth is slowing down and stock prices are under pressure! McDonald's (MCD.US) to host Key Investor Day test next week

The Zhitong Finance App learned that McDonald's (MCD.US) is scheduled to hold a key “Investor Day” (Investor Day) event on September 23. The update is expected to allow investors to understand how management plans to revive the growth momentum of the US market while maintaining international market growth.

After the cumulative drop in stock prices of more than 16% over the past year, investors will want McDonald's to give more clear guidance on the following aspects: development plans, capital allocation goals, franchisee economic models, menu innovation strategies, and the leveraging effects of digital business monetization paths and loyalty programs. Furthermore, the sustainability of the new drink platform will also be closely watched — the platform's listing performance in the US, Canada, and Germany has reportedly surpassed expectations.

Q2 results are steady, but slowing growth raises concerns

McDonald's handed over a steady but slowing report card for the second quarter of 2026 in early August. According to financial reports, the company's global systemic sales in the second quarter increased 5% year on year and increased 4% after excluding exchange rate factors to reach 37 billion US dollars; consolidated revenue was 7.1 billion US dollars, slightly lower than market expectations of 7.12 billion US dollars. Operating profit was $3.338 billion, up 3% year over year; adjusted earnings per share were $3.38, up 6% year over year, higher than market expectations of $3.32.

Despite solid earnings performance, growth momentum has weakened. McDonald's global comparable sales increased by 1.3% in the second quarter, significantly lower than 3.8% in the same period last year. Among them, comparable sales in the US market increased by 0.8%, down from 2.5% in the same period last year; the increase was mainly due to the increase in customer unit prices, including contributions brought about by product structure optimization, but comparable customer traffic was still negative, indicating that the frequency of consumers arriving at stores has not fully recovered. Faced with growing pressure from the core market, the company announced the appointment of senior executive Skye Anderson as McDonald's US president to enhance the execution of the US business.

Meanwhile, comparable sales in the International Direct Market (IOM) increased by 1.5%, compared to 4% in the same period last year. Among them, Germany, Australia, and the United Kingdom performed well, while the French market performed poorly. Comparable sales in the International Licensing Market (IDL) increased 1.9% compared to 5.6% in the same period last year.

It is worth mentioning that the franchise model is still the core advantage of McDonald's business model. Since franchisees bear most of the costs of restaurant operations, McDonald's mainly obtains revenue by collecting franchise fees and rents, so there is relatively little fluctuation in revenue and profit. The company's franchised restaurant revenue in the second quarter was US$4.393 billion, up 4% year on year, accounting for about 62% of total revenue; in the first half of this year, franchised restaurant revenue reached US$8.399 billion, up 7% year on year. The growth rate was higher than the overall revenue growth rate, further reflecting the franchise model's support for cash flow and profitability.

Furthermore, in the context of the overall growth of the catering industry slowing down, the digital membership system is becoming a key driving force for McDonald's to increase consumption frequency. In the past 12 months, the system sales contributed by members exceeded 40 billion US dollars, an increase of more than 20% over the previous year, far higher than the 5% growth rate of overall system sales; the number of active members in 90 days has reached 220 million, an increase of 13% over the previous year. The expansion of membership has not only increased the repurchase rate, but also enhanced accurate marketing capabilities based on consumption data. As digital penetration continues to increase, membership consumption is becoming an important driving force for the company's future growth.

McDonald's is also continuing to advance its “Accelerate Organizational Change” program. The cumulative restructuring costs for the first half of the year reached 99 million US dollars. Excluding this impact, adjusted operating profit increased by about 9% in the first half of the year, indicating the initial results of the reform. However, whether there will still be additional restructuring costs in the future and whether reforms can continue to improve operational efficiency are still the focus of the market's attention.

What do Wall Street analysts think?

Deutsche Bank analyst Lauren Silberman anticipates that McDonald's will announce some financial targets for 2027 and beyond (2028-2030) and provide more details on McDonald's “NEXT” strategy focusing on the next phase of growth and productivity.

Lauren Silberman wrote, “What we think is the most anticipated area of focus is how much co-funding McDonald's will undertake during the upcoming 10-year US store renovation cycle and what this means for incremental capital expenditure over the next few years.” However, she believes that considering global headwinds, the gradual entry of the US system into a reinvestment cycle, and the anticipated acceleration of franchising activities may bring tighter capital constraints, investors expect the store growth outlook to slow down somewhat. She also anticipates that technology and recent US market trends will also be key topics.

Royal Bank of Canada capital market analyst Logan Reich stressed that McDonald's Investor Day was held at a time when macroeconomic pressure was dragging down same-store sales growth, and interest in food and beverage stocks continued to be sluggish by using only more institutional capital. The bank believes that same-store sales growth will need to be accelerated again before investor interest heats up, and this is not expected to occur until the first quarter of 2027.

Logan Reich believes that the restaurant chain's plans to drive customer traffic will be the core area of investors' attention. “In terms of beverages, we expect the company to renew the pace of international expansion, and most markets around the world may soon introduce this platform.”

Morgan Stanley analyst Brian Harbor believes that the goal of this Investor Day is to generate market popularity for several pillars of the “NEXT” strategy, but discussions on related timelines and costs may mean that this event will not be an immediate positive catalyst, nor will it have an immediate impact on performance numbers. He said, “We think investors will want to see empirical evidence for some of the initiatives and see the performance numbers start to rise again — we ourselves do the same. Only then can we move to a clear bullish stance.”