Core Viewpoint - McDonald's is positioning itself as a value choice in a challenging economic environment, successfully attracting both higher and lower-income consumers through various initiatives [1][2][3] Group 1: Consumer Traffic and Income Segmentation - McDonald's reported a decline in traffic among lower-income customers, with nearly double-digit drops in the latest quarter, indicating a potential trade-down rather than increased spending [4][5] - Conversely, traffic from higher-income consumers increased, with industry data showing almost double-digit growth in this segment [5] - The company has introduced the Extra Value Meal (EVM), which has seen good success among lower-income consumers, accounting for about 30% of transactions [6] Group 2: Marketing and Menu Innovation - McDonald's is focusing on menu innovation and marketing execution, which includes the successful rollout of snack wraps and the relaunch of the Monopoly promotion after nearly ten years [9][10] - The company is offering value meals priced at $5 or $8, catering to consumers looking for affordable options [8] - The marketing strategies and new menu items are designed to keep consumers engaged and drive traffic, especially in a tough economic climate [10] Group 3: Competitive Landscape and Defensive Positioning - McDonald's is viewed as a defensive player in the consumer market, appealing to stressed consumers seeking value [12] - The company is expected to perform well in difficult economic times, with a focus on long-term growth and margin improvement [13] - Companies with healthy balance sheets and solid inventory levels are favored in the current environment, as they can better navigate potential economic challenges [15]

Core Insights - McDonald's Corp. reported stronger-than-expected global sales growth in Q3, driven by cost-conscious consumers seeking value offerings amid economic uncertainty [1] - Global comparable sales increased by 3.6%, slightly above the Street estimate of 3.59% [1] - U.S. same-store sales rose by 2.4%, a significant improvement from 0.3% a year ago, surpassing expectations of 2.14% [1] Sales and Promotions - Fast-food chains, including McDonald's, have focused on low-priced meal deals to address weaker demand for dining out [2] - McDonald's introduced promotions such as a $5 menu and a "buy one, add one for $1" offer to attract lower-income consumers, who form a significant part of its customer base [2] Financial Performance - Operating income grew by 5.3% year over year to $3.36 billion, despite a $39 million pre-tax restructuring charge impacting results [3] - Earnings per share were reported at $3.18, while revenue increased by 3% to $7.08 billion, indicating steady demand and operational efficiency gains across major markets [3]

Core Insights - McDonald's latest earnings report highlights a growing divide among U.S. consumers, with wealthier Americans continuing to dine out while lower-income families are opting to eat at home due to rising living costs and stagnant wages [1][3] Financial Performance - McDonald's U.S. same-store sales increased by 2.5% year-over-year, while global sales rose by 3.6%, although adjusted earnings per share (EPS) of $3.22 fell short of analyst expectations of $3.32 [1] - The company's revenue for the quarter was reported at $7.1 billion [1] Consumer Trends - There is a noticeable decline in quick-service restaurant (QSR) traffic among lower-income consumers, with a drop of nearly double digits in the third quarter, a trend that has persisted for almost two years [3] - Conversely, QSR traffic among higher-income consumers has shown strong growth, increasing by nearly double digits during the same period [3] Strategic Initiatives - To address the challenging economic environment, McDonald's plans to focus on delivering everyday value, menu innovation, and compelling marketing to attract customers [3] - The company is reintroducing extra-value meals, such as a $5 Sausage, Egg & Cheese McGriddles meal and an $8 10-piece Chicken McNuggets meal, starting in November [3] - Additionally, McDonald's has brought back the promotional game Monopoly in the U.S. for the first time in nearly a decade, emphasizing digital engagement [3]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-5231 McDONALD'S CORPORATION (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorp ...

Core Insights - McDonald's is attracting more high-income consumers while experiencing a decline in traffic from low-income households, with visits from high-earners increasing by nearly double digits last quarter and low-income visits falling by a similar amount [2][8] - The company continues to focus on value offerings, such as Extra Value Meals and the $2.99 Snack Wrap, emphasizing that value is important to all consumers, not just low-income ones [3][8] - Despite efforts to lower prices and provide deals, McDonald's executives noted that rising cost-of-living expenses may be limiting spending among low-income households [4] Financial Performance - McDonald's reported a 2.4% year-over-year increase in domestic comparable-restaurant sales last quarter, indicating improved business performance [7] - The company achieved diluted earnings per share of $3.18 on nearly $7.08 billion in revenue, slightly below analyst expectations of $3.33 per share on nearly $7.09 billion in revenue [9]

Core Viewpoint - McDonald's Corp. is experiencing a decline in U.S. consumer spending, particularly among lower-income customers, due to rising costs of necessities, which has led to a decrease in restaurant traffic from this demographic [1][2][5]. Group 1: Consumer Spending Trends - CEO Chris Kempczinski indicated that restaurant traffic from low-income diners has been declining at a nearly double-digit rate for almost two years [2][3]. - The decline in spending highlights the impact of inflation and high living costs on households with limited disposable income, forcing them to cut back on even affordable fast-food options [4][5]. Group 2: Company Strategies - To counteract the slowdown in consumer spending, McDonald's has implemented menu promotions and value offerings, such as the return of Snack Wraps and Extra Value Meals, aimed at attracting budget-conscious diners [4][5]. - The company believes that value is important across all income levels, not just for low-income consumers, as everyone seeks good value for their money [5]. Group 3: Economic Outlook - McDonald's anticipates that the challenging consumer environment and financial pressures on consumers will persist well into 2026, citing high costs of housing, childcare, and food as significant factors [5][6]. - The company is balancing the need for affordability with profitability as it navigates the broader consumer weakness and spending power divide across the U.S. [6].

Core Insights - McDonald's reported a 2.4% increase in US same-store sales for the third quarter, surpassing estimates of 1.9%, attributed to a larger average check despite the ongoing "value wars" in the fast-food industry [1][3] - The company experienced a net income of $2.28 billion, or $3.18 per share, which is an increase from $2.26 billion year-over-year, although earnings per share fell short of estimates at $3.22 [4][5] - Revenue rose 3% to $7.08 billion, slightly missing estimates of $7.1 billion, with expectations of continued economic concerns affecting customer spending into 2026 [7] Sales Performance - Same-store sales globally increased by 3.6%, reversing a decline of 1.5% from the previous year, with international markets showing strong growth [1][10] - In international operated markets, same-store sales rose 4.3%, while the international developmental licensed markets segment saw a 4.7% increase, driven by growth in Japan [10] Consumer Trends - The company noted a bifurcated consumer base, with traffic from lower-income consumers declining nearly double digits, while higher-income consumer traffic grew nearly double digits [4][10] - McDonald's is focusing on value meals to attract cash-strapped consumers, reintroducing items like Snack Wraps at a low price of $2.99, which became popular quickly [8][11] Future Outlook - The company is optimistic about future sales growth due to the return of Extra Value Meals and promotional deals, although it may face easier comparisons due to last year's E. coli outbreak impacting sales [11]

PAUL FAITH / AFP / Getty Images Seagate Technology was the best-performing stock in the S&P 500 Wednesday afternoon Key Takeaways Tech stocks rebounded from Tuesday's losses to help boost the major U.S. equities indexes Wednesday afternoon. Seagate Technology and other data storage stocks led gains on the S&P 500. McDonald's shares also climbed as its U.S. same-store sales exceeded expectations. Tech stocks rebounded from Tuesday's losses to help boost the major U.S. equities indexes Wednesday af ...

Labor Market Insights - The October ADP private-sector payroll report indicates an addition of +42K new jobs, surpassing expectations by +20K and reversing the previous month's downward revision of -29K [2] - Despite this positive report, the American labor market shows signs of decline, with an average gain of only +29K new jobs over the last four months, a decrease from +53K and +197K in the previous two four-month periods [3] Job Growth by Sector - Goods-producing jobs increased by +9K, while services jobs rose by +33K, with large firms (over 500 employees) contributing +73K to the job growth, contrasting with negative growth in small and medium-sized companies [4] - The Trade/Transportation/Utilities sector led job growth with +47K, followed by Education/Healthcare at +26K, while Leisure/Hospitality and Professional/Business Services saw declines of -6K and -15K respectively [5] Wage Trends - Wage gains for job stayers averaged +4.5%, while job changers saw an increase of +6.7%, indicating a narrowing historical gap and suggesting less urgency for employees to seek new positions [6] Company Earnings Reports - McDonald's (MCD) reported earnings of $3.22 per share, missing estimates of $3.35, but same-store sales increased by +3.6%, leading to a +3% rise in pre-market trading [7] - Humana (HUM) exceeded earnings expectations with $3.24 per share, a +11.34% beat, and revenues of $32.65 billion, but lowered guidance caused shares to drop by -5.5% [8] - Aurora Cannabis (ACB) reported earnings of $0.09 per share, a +200% surprise compared to expectations, with record quarterly revenues of $70.5 million, up +15% year-over-year, resulting in a +9% increase in pre-market trading [9]

Core Insights - McDonald's reported US same-store sales growth of 2.5%, exceeding Wall Street's expectation of 2.2% and matching the previous quarter's growth rate [1][2] - Global same-store sales increased by 3.6%, consistent with estimates, following a 3.8% rise in the previous quarter [2] - Adjusted earnings per share were $3.22, below the expected $3.32, with revenue at $7.1 billion, aligning with estimates [2] Sales Performance - Systemwide sales, including both company-operated and franchised locations, grew by 6% [3] - The return of the Snack Wrap and a deal with US franchisees to lower combo meal costs were key strategies to enhance value offerings [3] - The digital return of the Monopoly game significantly boosted app downloads and digital sales growth [3] Consumer Insights - The CEO noted a "bifurcated consumer base," with traffic among lower-income consumers declining nearly double digits, while higher-income consumers showed nearly double-digit growth [4] - The CFO projected an acceleration in US same-store sales growth for the fourth quarter, influenced by last year's E. coli outbreak [5] - The CEO expressed concerns about ongoing pressures on lower-income consumers due to high rents and food prices [5]