McDonald’s Misses Earnings Estimates. Why the Burger Giant’s Stock Is Rising Anyway.

McDonald’s global comparable sales have been strong in both international stores and the U.S. market. (Joe Raedle/Getty Images)

Key Points

• McDonald’s slightly misses third-quarter earnings estimates.
• Same-store sales increase 2.4% in the U.S. during the quarter, while global same-store sales rise 3.6%.
• McDonald’s has introduced new menu items and value deals, including a 15% price cut on eight combo meals.

McDonald’s stock gained on Wednesday, even after the company failed to beat earnings and revenue forecasts in its third quarter.

Adjusted earnings of $3.22 a share missed the $3.33 analysts had projected, according to FactSet. Third-quarter revenue came in at $7.08 billion, in line with consensus estimates.

Revenue from franchised restaurants climbed to $4.36 billion from $4.09 billion in the same period last year. It fell 3% to $2.56 billion for restaurants the company owns and operates.

The highlight of the quarter was an increase in same-store sales, both domestically and overseas. The metric grew 2.4% in the U.S. and 3.6% globally.

Despite the earnings miss, shares pared earlier losses to rise 2.4%. The benchmark S&P 500 index was up 0.8%.

Comparable sales growth across all business segments appeared to be driving those gains. CEO Chris Kempczinski touted the company’s “ability to deliver sustainable growth even in a challenging environment.”

The latest earnings report followed a strong second quarter, where earnings and sales both beat analysts’ forecasts and McDonald’s posted year-over-year growth. Those results marked a reversal from the first quarter, when the chain posted revenue that was 3% lower than the year-ago period and missed analysts’ expectations.

Global comparable sales were strong in the second quarter, where new menu items and promotional deals have put the burger chain back on track for growth. Same-store sales grew 3.8% from a year ago, a comeback from the 1% decline in the first quarter.

Like many fast-food chains, McDonald’s hiked prices aggressively during as inflation took off after the pandemic. Price-sensitive consumers cut back on dining out, opting instead to save money by cooking more meals at home.

To lure customers back, McDonald’s has been rolling out new products such as McCrispy Strips and Snack Wraps, and launched value deals like the $5 Meal Deal, and Buy One Get One for $1. Starting in September 2025, the company cut prices on eight popular combo meals in the U.S., setting them about 15% below what the items would cost individually.

The company has also expanded late-night operating hours at many of its U.S. restaurants and expanded its beverage business to better engage with younger Gen-Z customers. It has rolled out a range of coffee drinks, refreshers, and “dirty sodas” with add-ins like dried fruit and flavored syrups. Customer reaction to these new offerings is expected to be important to McDonald’s growth.

Wall Street’s positive outlook for McDonald’s comes after strong results from fast-food peer Restaurant Brands International, which owns Burger King, Popeyes, and Tim Hortons.

Last week, the company said its third-quarter systemwide sales were 6.9% higher year over year, while comparable sales accelerated 4%. Burger King reported 6.4% growth in international markets and 3.2% growth in the U.S. Earnings also increased from 93 cents a year ago to $1.03 per share.

Still, other corners of the restaurant industry are struggling. Last week, Chipotle Mexican Grill shares plunged nearly 20% after the company lowered its forecast for full-year same-store sales, pointing to a decline by a percentage in the low single digits.

Wendy’s is expected to report earnings on Friday. Sales are expected to drop 5.6% from a year ago, while earnings shrink from 25 cents to 20 cents per share.

Write to Evie Liu at evie.liu@barrons.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com