麦当劳首席执行官Chris Kempczinski周三在财报后的电话会议上表示，与竞争对手一样，认同早餐是经 济上最敏感的用餐时段，希望增加早餐吸引力。他解释，有经济压力的消费者很容易不吃早餐或选择在 家吃早餐。麦当劳今年稍早开始在美国全国广告推广早餐，是该公司近年来首次，麦当劳正在探索如何 进一步提升早餐的价值，但他没有透露更多细节。 ...

Core Insights - Despite a challenging macro environment, the company expresses satisfaction with its performance in the Chinese market, highlighting improvements in operations and growth in market share and same-store sales [1][3][22] - The company plans to open approximately 1,000 new stores in China this year, continuing its rapid expansion strategy [3][5] Chinese Market Performance - In Q2, the international franchise market, which includes China, recorded the highest same-store sales growth at 5.6%, a significant recovery from a decline of 1.3% in the same period last year [3][22] - Chicken products were a key driver of performance in the second quarter, contributing to increased market share in the fast-food sector [3][22] - As of June 30, the total number of McDonald's restaurants in China reached 7,227, reflecting a year-on-year increase of over 15% [5] Expansion Strategy - The company has successfully entered Qinghai and Ningxia, completing its coverage of all provincial-level administrative regions in China [7] - The company is focusing on increasing penetration in first- and second-tier cities, with cities like Shenzhen and Guangzhou surpassing 800 restaurants [7] Beverage Innovation - The company is testing new beverage products in hundreds of U.S. locations, including cold brew coffee and fruit drinks, aiming to tap into the high-margin beverage market [9][11] - The CEO emphasizes the importance of pricing strategy in the beverage segment, indicating that even lower-priced drinks can be profitable [11] Breakfast Segment Challenges - The breakfast segment is currently under pressure due to economic factors, with the company working on strategies to enhance value perception and drive customer traffic during this time [14][22] Global Financial Performance - In Q2, the company's global revenue reached $6.843 billion, a 4% year-on-year increase, with net profit rising by 9% to $2.253 billion [16] - The global same-store sales grew by 3.8%, with all segments showing broad growth [16] Future Outlook - The company maintains its adjusted operating margin target for 2025 at 46%-49%, despite ongoing cost pressures in various markets [18] - The CEO highlights the importance of aligning the brand's strengths with data and technology to drive future growth [19][20]

Group 1 - The investigation report on the Titan submersible incident indicates that the primary cause was deficiencies in design, certification, maintenance, and inspection processes by OceanGate Exploration Company [2] - The report highlights that after a 2022 dive, the Titan's hull showed abnormalities, but the company failed to conduct appropriate investigations or preventive maintenance before the 2023 dive [2] - The Titan submersible lost contact approximately 1 hour and 45 minutes into its dive on June 18, 2023, and was confirmed to have suffered a "catastrophic implosion" on June 22, resulting in the deaths of all five occupants [2] Group 2 - Li Auto, China Automotive Research, and Dongfeng Liuzhou Automobile issued a joint statement advocating for strict self-discipline in the automotive industry to maintain integrity and ethical standards [3] - The statement emphasizes focusing on core technology innovation and enhancing vehicle safety performance to improve the overall image and competitiveness of the Chinese automotive industry [3] Group 3 - Huawei filed a lawsuit against Transsion Holdings for allegedly infringing on a European patent related to image processing devices [3] - Transsion responded by stating it would actively defend its legal rights [3] Group 4 - TSMC reported a leak of critical information regarding its 2nm process technology, prompting an internal investigation and the dismissal of involved employees [4] - Apple is expected to hold its iPhone 17 series launch event on September 9, 2023 [4][5] Group 5 - Microsoft initiated a new round of layoffs in Washington state, bringing the total number of layoffs in the state to 3,160 this year, aligning with its focus on strategic growth areas, particularly in AI [9] - OpenAI's valuation has reportedly reached $500 billion as it engages in discussions for a potential employee stock sale [11] Group 6 - Tesla faces a collective lawsuit from investors alleging that the company exaggerated the safety of its Robotaxi service prior to its launch [11] - Xiamen Airlines denied rumors of an imminent IPO, clarifying that there are no specific plans for going public [11] Group 7 - The new Xiaopeng P7 was officially unveiled, featuring advanced technology and design elements, and is set to launch this month [18] - The new Wuling Bingguo S car was introduced, showcasing a high-quality design and various color options [20] Group 8 - The China Passenger Car Association reported that retail sales of passenger cars in July 2023 reached 1.834 million units, a 7% increase year-on-year [22] - The second quarter of 2023 saw a 24.3% year-on-year growth in China's consumer gaming laptop market, driven by demand from students and core gamers [22]

Group 1: Impact of Tariffs on Industries - The impact of President Trump's tariff policy is becoming evident, particularly affecting the industrial, manufacturing, and automotive sectors, with companies like Caterpillar, McDonald's, and Marriott reporting increased raw material costs and decreased demand [1][2] - Global companies are expected to face a profit impact of approximately $15 billion by 2025 due to trade policy, primarily affecting industrial, manufacturing, and automotive industries, while financial and technology sectors are less impacted [2] - Caterpillar reported a 0.7% decline in Q2 revenue, with a 6.5% increase in commodity costs, indicating that tariffs may pose a greater challenge to profitability in the second half of 2025 [2] Group 2: Company-Specific Financial Impacts - Ford Motor Company experienced a 5% increase in Q2 revenue to $50.2 billion, but adjusted EBIT fell to $2.1 billion from $2.8 billion year-over-year, with an estimated net tariff impact of about $2 billion for the fiscal year [2] - Molson Coors anticipates a cost increase of $20 million to $35 million in the second half of the year due to rising aluminum prices from tariffs, which doubled from 25% to 50% [3] - Marriott International lowered its 2025 forecast due to weak travel demand, while Archer Daniels Midland reported its lowest profit in five years [3] Group 3: Market Resilience and Future Outlook - Despite ongoing trade tensions and tariff increases, the market has shown resilience, with the S&P 500 and Nasdaq indices rising over 30% since April [4] - Approximately 80.3% of the 370 companies in the S&P 500 that have reported earnings exceeded analyst expectations, with an earnings growth rate of 11.9% [4] - Analysts suggest that while some industries may be affected by tariffs, a clearer picture will emerge in the coming quarters, with potential for a market pullback of 7% to 15% anticipated in September to October [4][6]

Industry Overview & Competitive Advantage - The industry benefits from McDonald's strong same-store sales performance, but this could pose challenges for competitors [1] - McDonald's scale allows it to offer products at lower prices than its peers, while still enabling franchisees to profit [2][3] - Overseas, McDonald's operates with less competition, positioning it as a pricing leader [5][6] Financial Performance & Growth Strategy - McDonald's is experiencing a strong second half of the year, driven by easier comparisons and international market growth [3] - International markets are leading the company's growth, outpacing the U S market in the past year or so [3][5] - The company is implementing a similar playbook overseas as in the U S, but is potentially ahead in providing everyday value [4] Consumer Behavior & Value Proposition - McDonald's acknowledges a double-digit traffic decline among low-income consumers, while seeing gains with middle and high-income consumers [8] - The company is focusing on value offerings, such as $5 meals and "buy one, get one for a dollar" promotions, to attract price-sensitive consumers [9] - McDonald's aims to improve product quality and service while maintaining competitive price points [10] Product Innovation & Menu Strategy - McDonald's is reintroducing popular items like snack wraps and crispy shrimp, and debuting new offerings like the "daily double" [2] - The company is improving the quality of its beef and burgers, and introducing larger burger options like the "Big Arch" [6][7] - McDonald's is expanding its chicken offerings internationally [7]

Core Insights - McDonald's reported a strong recovery in Q2 2025 with earnings per share (EPS) of $3.14 and revenue of $6.84 billion, surpassing analyst expectations [1][2] - The company experienced a 3.8% increase in global comparable sales, a significant improvement from a 1.0% decline in Q2 2024, indicating a turnaround in performance [5][10] - Management highlighted ongoing pressures on certain consumer groups and margin risks, despite the positive sales momentum [1][7] Financial Performance - EPS (GAAP) increased by 12% year-over-year from $2.80 in Q2 2024 to $3.14 in Q2 2025 [2] - Revenue (GAAP) rose by 5.4% from $6.49 billion in Q2 2024 to $6.84 billion in Q2 2025, exceeding estimates by $145 million [2] - Operating income grew by 11% to $3.23 billion, while net income also increased by 11% to $2.25 billion [2] Business Model and Strategy - McDonald's operates primarily through a franchise model, with about 95% of its restaurants being franchise-operated, contributing to steady revenue streams [3] - The company focuses on menu innovation, digital engagement, and consistent brand messaging to attract customers and drive sales [4][6] - Recent successful promotions, such as the $5 Meal Deal, have significantly contributed to customer traffic and sales recovery [6] Market Performance - All operating segments reported positive comparable sales, with the U.S. segment seeing a 2.5% increase, reversing the previous year's decline [5] - The International Operated Markets segment grew by 4.0%, while the International Developmental Licensed Markets segment saw a 5.6% increase in comparable sales [5] Future Outlook - Management reaffirmed its financial outlook for 2025, expecting slight positive effects from foreign currency and higher margins in the U.S. [10] - Continued investments in value offerings and menu innovation are crucial for maintaining sales growth, especially among lower- and middle-income consumers [10][11] - Key areas to monitor include the impact of value menu strategies on profit margins and the effectiveness of marketing partnerships [11]

Core Insights - McDonald's Corporation reported strong second-quarter 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate, leading to a 3.5% increase in share price during pre-market trading [1][3][9] Financial Performance - Adjusted earnings per share (EPS) for Q2 2025 were $3.19, surpassing the consensus estimate of $3.15, reflecting a 7.4% year-over-year increase [3] - Quarterly net revenues reached $6,843 million, exceeding the consensus mark of $6,714 million, and showing a 5% year-over-year growth [3] - Total operating costs and expenses were $3.6 billion, up 1% year over year, while operating income rose 11% to $3.2 billion [8] Sales and Comparable Performance - Global comparable sales increased by 3.8%, rebounding from a 1% decline in the prior-year quarter, outperforming the estimated 2.4% increase [5][9] - Sales at company-operated restaurants remained flat at $2.5 billion, while franchise-operated restaurant sales grew by 7% to $4.2 billion [4] - Other revenues surged by 92% year over year to $172 million [4] Segment Performance - In the U.S., segmental comparable sales rose 2.5%, compared to a 0.7% decline in the previous year, driven by positive check growth [6] - Internationally, segmental comps increased by 4%, rebounding from a 1.1% decline, with all markets reporting positive comparable sales [7] - The International Developmental Licensed Segment saw a 5.6% increase in comparable sales, contrasting with a 1.3% decline in the prior-year quarter [7] Strategic Initiatives - The company's performance was bolstered by strong value offerings, effective marketing, and menu innovation that resonated with customers globally [2] - Investments in technology and rapid digital expansion enhanced convenience and customer engagement across various channels [2]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) This section presents McDonald's unaudited financial statements, management's analysis, market risk, and controls [Item 1. Financial Statements](index=3&type=section&id=Item%201%20%E2%80%93%20Financial%20Statements) This section presents McDonald's unaudited condensed consolidated financial statements, including the balance sheet, income statement, comprehensive income, cash flows, and shareholders' equity, along with detailed notes providing context on accounting policies, restaurant operations, strategic initiatives, and segment performance [Condensed Consolidated Balance Sheet](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) This statement provides a snapshot of the company's assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------- | :------------ | :---------------- | :----- | | Cash and equivalents | $1,876 | $1,085 | +$791 | | Total current assets | $5,601 | $4,599 | +$1,002 | | Net property and equipment | $27,039 | $25,295 | +$1,744 | | Total assets | $59,555 | $55,182 | +$4,373 | | Short-term borrowings | $602 | $— | +$602 | | Total current liabilities | $4,298 | $3,861 | +$437 | | Long-term debt | $40,801 | $38,424 | +$2,377 | | Total shareholders' equity (deficit) | $(2,760) | $(3,797) | +$1,037 | [Condensed Consolidated Statement of Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Income) This statement details the company's revenues, expenses, and net income over specific reporting periods Condensed Consolidated Statement of Income Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YoY Change (%) | 6M 2025 | 6M 2024 | YoY Change (%) | | :---------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Total revenues | $6,843 | $6,490 | 5% | $12,799 | $12,659 | 1% | | Revenues from franchised restaurants | $4,213 | $3,940 | 7% | $7,874 | $7,663 | 3% | | Sales by Company-owned restaurants | $2,458 | $2,461 | (0%) | $4,590 | $4,816 | (5%) | | Operating income | $3,232 | $2,920 | 11% | $5,880 | $5,655 | 4% | | Net income | $2,253 | $2,022 | 11% | $4,121 | $3,951 | 4% | | Diluted EPS | $3.14 | $2.80 | 12% | $5.74 | $5.46 | 5% | | Dividends per common share | $1.77 | $1.67 | 6% | $3.54 | $3.34 | 6% | [Condensed Consolidated Statement of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This statement reports net income and other comprehensive income components from non-owner sources Condensed Consolidated Statement of Comprehensive Income Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | Net income | $2,253 | $2,022 | $4,121 | $3,951 | | Foreign currency translation adjustments | $237 | $69 | $307 | $(46) | | Cash flow hedges | $(97) | $2 | $(164) | $39 | | Defined benefit pension plans | $(13) | $— | $(20) | $1 | | Total other comprehensive income (loss) | $127 | $71 | $123 | $(6) | | Comprehensive income | $2,380 | $2,093 | $4,244 | $3,945 | [Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statement of Cash Flows Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Cash provided by operations | $1,998 | $1,689 | $4,426 | $4,079 | | Cash used for investing activities | $(869) | $(846) | $(1,641) | $(3,338) | | Cash used for financing activities | $(555) | $(869) | $(2,098) | $(4,530) | | Cash and equivalents at end of period | $1,876 | $792 | $1,876 | $792 | [Condensed Consolidated Statement of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Shareholders%27%20Equity) This statement outlines changes in equity accounts, including net income, dividends, and share repurchases Condensed Consolidated Statement of Shareholders' Equity Highlights (in millions) | Metric | Dec 31, 2024 | June 30, 2025 | Change | | :-------------------------------- | :----------- | :------------ | :----- | | Total shareholders' equity (deficit) | $(3,797) | $(2,760) | +$1,037 | | Net income (6 months) | N/A | $4,121 | N/A | | Other comprehensive income (loss) (6 months) | N/A | $123 | N/A | | Common stock cash dividends (6 months) | N/A | $(2,530) | N/A | | Treasury stock purchases (6 months) | N/A | $(953) | N/A | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes offer detailed explanations and disclosures supporting the condensed consolidated financial statements [Basis of Presentation](index=9&type=section&id=Basis%20of%20Presentation) This section outlines the accounting principles and assumptions underlying the financial statements - The financial statements are unaudited and include all normal recurring adjustments, but results for the quarter and six months ended June 30, 2025, do not necessarily indicate full-year results[20](index=20&type=chunk) [Restaurant Information](index=10&type=section&id=Restaurant%20Information) This section provides details on the company's restaurant count and ownership structure Restaurant Count by Ownership Type | Restaurants at June 30, | 2025 | 2024 | | :---------------------- | :--- | :--- | | Conventional franchised | 22,171 | 21,892 | | Developmental licensed | 9,373 | 8,815 | | Foreign affiliated | 10,515 | 9,531 | | Total Franchised | 42,059 | 40,238 | | Company-owned and operated | 2,054 | 2,168 | | Total Systemwide restaurants | 44,113 | 42,406 | [Per Common Share Information](index=10&type=section&id=Per%20Common%20Share%20Information) This section explains the calculation of diluted earnings per common share, including dilutive effects - Diluted earnings per common share calculation includes the dilutive effect of share-based compensation, which was **3.1 million shares** for the quarter ended June 30, 2025, and **3.2 million shares** for the six months ended June 30, 2025[23](index=23&type=chunk) [Recent Accounting Pronouncements](index=10&type=section&id=Recent%20Accounting%20Pronouncements) This section addresses recently issued accounting standards and their potential impact on financial disclosures - The FASB issued ASU 2023-09 (Income Taxes) effective for fiscal years after December 15, 2024, and ASU 2024-03 (Expense Disaggregation) effective for fiscal years after December 15, 2026. The Company is currently assessing the impact of these ASUs on its consolidated financial statement disclosures[24](index=24&type=chunk)[25](index=25&type=chunk) [Accelerating the Organization](index=11&type=section&id=Accelerating%20the%20Organization) This section outlines restructuring charges incurred as part of the 'Accelerating the Organization' initiative - The Company incurred **$109 million** in restructuring charges related to its 'Accelerating the Organization' initiative for the six months ended June 30, 2025, with total charges of **$580 million** since 2023 and an expected **$300 million** in 2025[27](index=27&type=chunk)[28](index=28&type=chunk)[30](index=30&type=chunk) [Equity Method Investments](index=12&type=section&id=Equity%20Method%20Investments) This section details significant investments accounted for under the equity method, including earnings contributions - Primary equity method investments include partial ownership in Grand Foods Holding (mainland China, Hong Kong, Macau) and McDonald's Japan Holdings Co., Ltd, with equity in earnings of **$94 million** for the six months ended June 30, 2025[32](index=32&type=chunk)[36](index=36&type=chunk) [Income Taxes (Notes)](index=13&type=section&id=Income%20Taxes%20%28Notes%29) This section provides details on the effective income tax rates for the reported periods - The effective income tax rate was **21.3%** for the quarter ended June 30, 2025 (up from 20.9% in 2024), and **20.6%** for the six months ended June 30, 2025 (up from 20.4% in 2024)[37](index=37&type=chunk) [Fair Value Measurements](index=13&type=section&id=Fair%20Value%20Measurements) This section details fair value measurements of the company's financial instruments, particularly debt obligations - At June 30, 2025, the fair value of the Company's debt obligations was estimated at **$39.8 billion**, compared to a carrying amount of **$41.4 billion**, classified as Level 2 within the valuation hierarchy[39](index=39&type=chunk) [Financial Instruments and Hedging Activities](index=14&type=section&id=Financial%20Instruments%20and%20Hedging%20Activities) This section describes the company's use of financial instruments and derivatives for hedging global market risks - McDonald's uses foreign currency denominated debt and derivative instruments to mitigate global market risks, with **$15.4 billion** of third-party foreign currency denominated debt and **$2.4 billion** of foreign currency derivatives designated as net investment hedges as of June 30, 2025[41](index=41&type=chunk)[46](index=46&type=chunk) [Franchise Arrangements](index=17&type=section&id=Franchise%20Arrangements) This section outlines the revenue streams derived from the company's franchised restaurant operations Revenues from Franchised Restaurants (in millions) | In millions | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :---------- | :------ | :------ | :------ | :------ | | Rents | $2,677 | $2,523 | $4,990 | $4,904 | | Royalties | $1,517 | $1,402 | $2,847 | $2,728 | | Initial fees | $18 | $16 | $37 | $31 | | Total | $4,213 | $3,940 | $7,874 | $7,663 | [Segment Information](index=17&type=section&id=Segment%20Information) This section presents financial data broken down by the company's global operating segments - McDonald's operates under three global segments: U.S. (**95% franchised**), International Operated Markets (**89% franchised**), and International Developmental Licensed Markets & Corporate (**99% franchised**), with segment performance evaluated based on operating income[50](index=50&type=chunk)[52](index=52&type=chunk) Segment Revenues (Q2 2025 vs Q2 2024, in millions) | Segment | Q2 2025 | Q2 2024 | | :-------------------------------------- | :------ | :------ | | U.S. | $2,781 | $2,698 | | International Operated Markets | $3,462 | $3,147 | | International Developmental Licensed Markets & Corporate | $600 | $645 | | Total Revenues | $6,843 | $6,490 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202%20%E2%80%93%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on McDonald's financial condition and results of operations for the quarter and six months ended June 30, 2025, highlighting key performance drivers, strategic initiatives, and future outlook, including the impact of global events and currency fluctuations [Basis of Presentation (MD&A)](index=19&type=section&id=Basis%20of%20Presentation%20%28MD%26A%29) This section establishes the context for reading the Management's Discussion and Analysis of Financial Results - This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and the audited consolidated financial statements in the 2024 Annual Report on Form 10-K[55](index=55&type=chunk) [Overview](index=19&type=section&id=Overview) This section provides a high-level summary of the company's global operations and franchised business model - McDonald's operates over **44,113 restaurants** globally, with approximately **95% franchised**, leveraging a heavily franchised business model for stable revenue and cash flow, complemented by Company-owned restaurants for operational training and innovation[57](index=57&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk)[65](index=65&type=chunk) [Strategic Direction](index=21&type=section&id=Strategic%20Direction) This section details the 'Accelerating the Arches' growth strategy and future restaurant expansion plans - The 'Accelerating the Arches' growth strategy focuses on 'M-C-D' (Maximize Marketing, Commit to Core menu, Double Down on 4D's: Digital, Delivery, Drive Thru, Restaurant Development) and three technology-enabled platforms (Consumer, Restaurant, Company) to drive growth and efficiency[69](index=69&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - The Company plans to open about **2,200 new restaurants** (gross) in 2025, progressing toward a targeted expansion to **50,000 restaurants** by the end of 2027, which would be the fastest period of restaurant unit growth in Company history[75](index=75&type=chunk) [Second Quarter and Six Months 2025 Financial Performance](index=24&type=section&id=Second%20Quarter%20and%20Six%20Months%202025%20Financial%20Performance) This section summarizes the company's key financial performance metrics for the second quarter and six months of 2025 - Global comparable sales increased **3.8%** for the quarter and **1.4%** for the six months ended June 30, 2025. Consolidated revenues increased **5%** (**4% in constant currencies**) for the quarter and **1% (1% in constant currencies)** for the six months[78](index=78&type=chunk)[80](index=80&type=chunk) [The Following Definitions Apply to these Terms as Used Throughout this Report](index=25&type=section&id=Definitions) This section provides definitions for key financial terms used consistently throughout the report - Key financial terms are defined, including 'constant currency' (excluding foreign currency translation effects), 'comparable sales' (sales at restaurants open at least 13 months, excluding currency and hyperinflationary markets), 'Systemwide sales' (sales at all restaurants, Company-owned and franchised), and 'free cash flow' (cash from operations less capital expenditures)[82](index=82&type=chunk) [CONSOLIDATED OPERATING RESULTS](index=26&type=section&id=Consolidated%20Operating%20Results) This section provides a consolidated overview of the company's operating performance, including revenues and net income Consolidated Operating Results (Q2 & 6M 2025 vs 2024, in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YoY Change (%) | 6M 2025 | 6M 2024 | YoY Change (%) | | :---------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Total revenues | $6,843 | $6,490 | 5% | $12,799 | $12,659 | 1% | | Operating income | $3,232 | $2,920 | 11% | $5,880 | $5,655 | 4% | | Net income | $2,253 | $2,022 | 11% | $4,121 | $3,951 | 4% | | Diluted EPS | $3.14 | $2.80 | 12% | $5.74 | $5.46 | 5% | [Impact of the War in the Middle East](index=27&type=section&id=Impact%20of%20the%20War%20in%20the%20Middle%20East) This section addresses the negative impact of the Middle East conflict on Systemwide sales and revenue - The war in the Middle East continues to negatively impact Systemwide sales and revenue, primarily in the International Developmental Licensed Markets, and is expected to persist until the war concludes and macroeconomic conditions recover[84](index=84&type=chunk) [Impact of Foreign Currency Translation](index=27&type=section&id=Impact%20of%20Foreign%20Currency%20Translation) This section analyzes the effect of foreign currency translation on consolidated operating results - Foreign currency translation had a positive impact on consolidated operating results for both periods, primarily reflecting the strengthening of most major currencies against the U.S. Dollar, contributing **$124 million** to Q2 2025 revenues and **$10 million** to 6M 2025 revenues[85](index=85&type=chunk)[87](index=87&type=chunk) [Net Income and Diluted Earnings per Share](index=28&type=section&id=Net%20Income%20and%20Diluted%20Earnings%20per%20Share) This section provides an overview of the changes in net income and diluted earnings per share - Net income increased **11%** (**9% in constant currencies**) to **$2,253 million** for the quarter and **4% (4% in constant currencies)** to **$4,121 million** for the six months. Diluted earnings per share increased **12%** (**10% in constant currencies**) to **$3.14** for the quarter and **5% (5% in constant currencies)** to **$5.74** for the six months[88](index=88&type=chunk)[89](index=89&type=chunk) - During the quarter, the Company paid **$1.3 billion** in dividends (**$1.77 per share**) and repurchased **1.7 million shares** of stock for **$506 million**[90](index=90&type=chunk) [Revenues (MD&A)](index=29&type=section&id=Revenues%20%28MD%26A%29) This section analyzes the drivers behind the company's total revenue growth for the reported periods - Total revenues increased **5%** (**4% in constant currencies**) for the quarter and **1% (1% in constant currencies)** for the six months, driven by positive sales performance in the International Operated Markets and a significant increase in Other revenues (**92% for Q2, 85% for 6M**)[95](index=95&type=chunk) [Comparable Sales](index=32&type=section&id=Comparable%20Sales) This section details comparable sales growth across the company's various operating segments Comparable Sales Growth | Segment | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | U.S. | 2.5% | (0.7)% | (0.5)% | 0.9% | | International Operated Markets | 4.0% | (1.1)% | 1.6% | 0.7% | | International Developmental Licensed Markets | 5.6% | (1.3)% | 4.5% | (0.8)% | | Total | 3.8% | (1.0)% | 1.4% | 0.4% | [Systemwide Sales and Franchised Sales](index=32&type=section&id=Systemwide%20Sales%20and%20Franchised%20Sales) This section reports the growth in total Systemwide sales and sales from franchised restaurants - Systemwide sales increased **8%** (**6% in constant currencies**) for the quarter and **4% (4% in constant currencies)** for the six months. Franchised sales grew **9% (7% in constant currencies)** for the quarter and **4% (4% in constant currencies)** for the six months[98](index=98&type=chunk)[99](index=99&type=chunk) [Restaurant Margins](index=34&type=section&id=Restaurant%20Margins) This section analyzes the profitability of both franchised and company-owned restaurant operations - Franchised margins reflected sales-driven growth across all segments for both periods, representing approximately **90%** of total restaurant margin dollars. Company-owned and operated margins were impacted by ongoing inflationary cost pressures and negative sales performance in the U.S.[102](index=102&type=chunk) [Selling, General & Administrative Expenses (MD&A)](index=36&type=section&id=Selling%2C%20General%20%26%20Administrative%20Expenses%20%28MD%26A%29) This section discusses the changes and drivers of selling, general, and administrative expenses - Selling, general and administrative expenses increased **1% (flat in constant currencies)** for the quarter due to higher incentive-based compensation, and decreased **2% (2% in constant currencies)** for the six months, primarily due to comparison to prior year convention costs[107](index=107&type=chunk) [Other Operating (Income) Expense, Net (MD&A)](index=36&type=section&id=Other%20Operating%20%28Income%29%20Expense%2C%20Net%20%28MD%26A%29) This section explains the components and changes in other operating income and expense, net - The increase in asset dispositions and other (income) expense, net for both periods reflected higher asset write-offs, store closing costs, and litigation settlements, partly offset by higher equity in earnings of unconsolidated affiliates[105](index=105&type=chunk)[108](index=108&type=chunk) [Operating Income (MD&A)](index=37&type=section&id=Operating%20Income%20%28MD%26A%29) This section analyzes the factors contributing to the company's operating income growth - Operating income increased **11% (8% in constant currencies)** for the quarter and **4% (4% in constant currencies)** for the six months, primarily reflecting positive operating results due to sales-driven growth in Franchised margins across all segments[109](index=109&type=chunk)[111](index=111&type=chunk) [Interest Expense (MD&A)](index=38&type=section&id=Interest%20Expense%20%28MD%26A%29) This section discusses the changes in interest expense, driven by debt balances and interest rates - Interest expense increased **4% (3% in constant currencies)** for the quarter and **3% (3% in constant currencies)** for the six months, driven by higher average debt balances and, for the six months, higher average interest rates[113](index=113&type=chunk) [Nonoperating (Income) Expense, Net (MD&A)](index=38&type=section&id=Nonoperating%20%28Income%29%20Expense%2C%20Net%20%28MD%26A%29) This section details the components of nonoperating income and expense, net, including interest income - Nonoperating (income) expense, net was **$(18) million** for the quarter and **$(76) million** for the six months, with interest income decreasing for the six months due to lower average cash balances and lower average interest rates[114](index=114&type=chunk) [Income Taxes (MD&A)](index=38&type=section&id=Income%20Taxes%20%28MD%26A%29) This section covers the effective income tax rate and the potential impact of new tax legislation - The effective income tax rate was **21.3%** for the quarter ended June 30, 2025, and **20.6%** for the six months. The Company is currently assessing the impact of new U.S. tax legislation (Public Law Number 119-21) enacted July 4, 2025[119](index=119&type=chunk) [Cash Flows (MD&A)](index=38&type=section&id=Cash%20Flows%20%28MD%26A%29) This section analyzes the company's cash flows from operating, investing, and financing activities - Cash provided by operations totaled **$4.4 billion** for the six months ended June 30, 2025, exceeding capital expenditures by **$3.1 billion**. Cash used for investing activities decreased by **$1.7 billion** compared to the prior year, primarily due to a prior-year acquisition of McDonald's China business[116](index=116&type=chunk)[117](index=117&type=chunk) [Outlook](index=39&type=section&id=Outlook) This section presents the company's financial and operational expectations and guidance for the upcoming year - For 2025, McDonald's expects net restaurant unit expansion to contribute slightly over **2%** to Systemwide sales growth, SG&A expenses around **2.2%** of Systemwide sales, operating margin in the mid-to-high **40% range**, and capital expenditures between **$3.0 billion** and **$3.2 billion** for approximately **2,200 new restaurants**[122](index=122&type=chunk) [Recent Accounting Pronouncements (MD&A)](index=39&type=section&id=Recent%20Accounting%20Pronouncements%20%28MD%26A%29) This section refers to the detailed discussion of recent accounting pronouncements found elsewhere in the report - Recent accounting pronouncements are discussed in the 'Recent Accounting Pronouncements' section in Part I, Item 1 of this report[121](index=121&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there were no material changes to the Company's disclosures regarding quantitative and qualitative market risk from its Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to market risk disclosures were reported compared to the 2024 Annual Report on Form 10-K[182](index=182&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025. The Company is undergoing a multi-year technology and operating model transformation to modernize processes and create efficiencies, which has led to modifications in internal control procedures, but no material changes to internal control over financial reporting were reported - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[183](index=183&type=chunk) - The Company is undergoing a multi-year technology and operating model transformation to modernize processes and create efficiencies, which includes implementing new systems and centralizing functions, leading to modified processes to enhance internal control over financial reporting[184](index=184&type=chunk)[185](index=185&type=chunk) - Except for changes related to the ongoing transformation, there has been no change in the Company's internal control over financial reporting during the fiscal quarter ended June 30, 2025, that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting[186](index=186&type=chunk) [Part II. Other Information](index=55&type=section&id=Part%20II.%20Other%20Information) This section includes disclosures on legal proceedings, risk factors, equity sales, other information, and exhibits [Item 1. Legal Proceedings](index=55&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) This section states that there were no material changes to the Company's disclosures regarding legal proceedings from its Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to legal proceedings disclosures were reported compared to the 2024 Annual Report on Form 10-K[188](index=188&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) This section outlines various risks that could adversely affect McDonald's business, financial condition, and results of operations, categorized into strategy and brand, operations, legal and regulatory, and macroeconomic and market conditions [Cautionary Statement Regarding Forward-Looking Statements](index=40&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section provides a cautionary statement regarding the forward-looking nature of certain statements in the report - This report contains forward-looking statements about future events and circumstances, which reflect expectations but are not guarantees of performance, and the Company does not undertake to update such statements except as required by law[123](index=123&type=chunk) [STRATEGY AND BRAND](index=40&type=section&id=Strategy%20and%20Brand%20Risks) This section identifies risks associated with business strategy execution, brand value, and market trend adaptation - Risks include the inability to successfully evolve and execute business strategies (e.g., Accelerating the Arches), preserve brand value, anticipate industry trends, effectively execute pricing/marketing plans, or generate expected results from technology investments[125](index=125&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk)[132](index=132&type=chunk) [OPERATIONS](index=44&type=section&id=Operations%20Risks) This section covers operational risks including global scope, supply chain, franchise model, labor, and food safety - Operational risks encompass challenges from global scope (cultural, regulatory, geopolitical), supply chain interruptions, inherent risks in the franchise business model (franchisee financial success, cooperation, operational problems), labor availability and cost issues, food safety concerns, and ineffective real estate portfolio management[139](index=139&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[147](index=147&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) [LEGAL AND REGULATORY](index=48&type=section&id=Legal%20and%20Regulatory%20Risks) This section addresses risks arising from legal complexity, potential litigation, and changes in tax or accounting regulations - Legal and regulatory risks include increasing complexity (restaurant operations, food safety, marketing, privacy), potential litigation (class actions, employment claims), challenges to the franchise business model, changes in tax laws, and adverse effects from new accounting standards or impairment charges[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[166](index=166&type=chunk) [MACROECONOMIC AND MARKET CONDITIONS](index=50&type=section&id=Macroeconomic%20and%20Market%20Conditions%20Risks) This section identifies risks stemming from macroeconomic conditions, currency fluctuations, health crises, and operating costs - Macroeconomic risks include unfavorable general economic conditions (inflationary pressures, consumer spending), currency exchange rate fluctuations, health epidemics/pandemics, changes in commodity and operating costs, decreased credit ratings, and increasing focus on environmental and social impact matters[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[176](index=176&type=chunk)[181](index=181&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's common stock repurchases during the quarter ended June 30, 2025, as part of its publicly announced share repurchase program Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | :----------------- | :----------------------------- | :--------------------------- | :----------------------------------------------------------------------- | :------------------------------------------------------------------------------------ | | April 1-30, 2025 | 262,109 | $308.86 | 262,109 | $14,472,464,530 | | May 1-31, 2025 | 577,352 | $316.54 | 577,352 | $14,289,711,770 | | June 1-30, 2025 | 819,559 | $295.83 | 819,559 | $14,047,263,491 | | Total | 1,659,020 | $305.09 | 1,659,020 | N/A | [Item 5. Other Information](index=55&type=section&id=Item%205%20%E2%80%93%20Other%20Information) This section discloses Rule 10b5-1 trading plans adopted by officers and directors during the quarter, specifically noting one plan by Manu Steijaert for the exercise and sale of stock options - Manu Steijaert, EVP – President, IOM, adopted a Rule 10b5-1 trading plan on May 27, 2025, to sell **19,701 securities** (exercise and sale of stock options) by December 31, 2025[192](index=192&type=chunk)[193](index=193&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206%20%E2%80%93%20Exhibits) This section lists the exhibits filed with the 10-Q report, including certifications from the Chief Executive Officer and Chief Financial Officer, and XBRL-related documents - The report includes Rule 13a-14(a) Certifications from the Chief Executive Officer and Chief Financial Officer, Certification pursuant to 18 U.S.C. Section 1350, and various Inline XBRL Taxonomy Extension documents[194](index=194&type=chunk) [Signature](index=57&type=section&id=Signature) This section provides the official signature and date of the report's submission - The report was signed by Ian F. Borden, Executive Vice President and Global Chief Financial Officer, on August 6, 2025[196](index=196&type=chunk)

Sales Performance - McDonald's gains driven by international sales beat [1] Market Dynamics - Bloomberg Stock Movers report highlights winners and losers on Wall Street [1]

Core Insights - McDonald's Corp reported second-quarter earnings of $3.19 per share on revenue of $6.84 billion, exceeding expectations, driven by marketing efforts and menu changes [1] Financial Performance - The stock price increased by 3% to $307.75, reaching its highest level since June and on track for the largest single-day percentage gain since April 22 [2] - Year-over-year, McDonald's shows a 13.9% lead in performance [2] Market Sentiment - Despite recent successes, there are concerns regarding McDonald's ability to retain low-income consumers, with 18 out of 33 firms maintaining a "hold" or worse rating on the stock [3] - Options traders have shown increased bullish sentiment, with a 10-day call/put volume ratio of 1.76, ranking higher than 82% of readings from the past year [4] Options Activity - Current options volume is double the typical intraday average, with 12,000 calls and 9,374 puts traded, indicating strong interest [5] - The most popular contract is the 8/8 weekly 310-strike call, with new positions being opened [5]