McDonald's sales top forecasts as value push, promotions boost US results for third-straight quarter
McDonald's (MCD) reported fourth quarter results on Wednesday that surpassed Wall Street expectations as its value meal focus and marketing efforts brought more customers in the door as US sales grew for the third-straight quarter.
McDonald's said Wednesday that its US same-store sales grew 6.8% during the quarter, more than the 5.1% rise the Street expected, according to data from Bloomberg. Its full-year US same-store sales rose 2.1%, above the 1.6% expected.
The fast-food chain's stock rose about 1% on Thursday.
While the US drove growth in the quarter, its international markets also benefited from marketing promotions. Global same-store sales rose 5.7% for the fourth quarter, higher than the estimated 3.8% jump. For the full year, international sales rose 3.1%, more than the 2.6% estimated.
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"McDonald's value leadership is working... By listening to customers and taking action, we have improved traffic and strengthened our value and affordability skills," Chairman and CEO Chris Kempczinski said in the release. In September, the company reintroduced Extra Value Meals, which offered a 15% discount.
Adjusted earnings per share tallied a 10% increase to $3.12, more than the expected $3.04 for the quarter. For the year, the same metric came in at $12.20, $0.06 higher than what analysts forecast.
Revenue beat for the quarter and the year at $7 billion and $26.9 billion, both a tad higher than the estimated $6.8 billion and $26.7 billion, respectively.
"We're not going to not win on value," CFO Ian Borden told Yahoo Finance. "We've made, I think, significant progress on our value and affordability platforms and how those are resonating with consumers."
Support for franchisees on its Extra Value Meal push is expected to roll off in the first quarter, but Borden suggested franchisees would keep it, calling the deal "fundamental in the environment that we're operating in today."
Borden said the company expects the fast food industry environment in the US and across other markets to "remain challenging" in 2026.
"If there's an upside because consumers have more money through things like some of the stimulus that's going in place, we certainly believe we're really going to benefit disproportionately from kind of the upside," Borden added.
Many analysts are optimistic that larger tax refunds will provide a boost to consumer spending.
Borden told analysts on the company's earnings call that it expects first quarter results in both the US and international markets to "decelerate sequentially" from the fourth quarter.
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