MCD's International Markets Stay Resilient: What's Supporting Comps?

Core Insights - McDonald's Corporation (MCD) demonstrated strong international comparable sales growth in Q3 2025, despite ongoing consumer pressure and a challenging global quick-service restaurant (QSR) environment [1][7] - Both International Operated Markets (IOM) and International Developmental Licensee (IDL) segments contributed positively to growth, with every IOM market showing an increase [1][7] Performance Drivers - The performance was primarily driven by disciplined value execution and localized marketing strategies within McDonald's global operating model [2] - Germany achieved its strongest comparable performance in two years, continuing a nearly four-year trend of market share gains, supported by consistent value platforms and focused marketing [2] - In Australia, a 12-month value pricing strategy initiated in July 2025 provided consumer predictability and supported traffic and market share [2] Operational Efficiency - Operational execution and scale efficiencies played a significant role in supporting international results, with management highlighting sourcing efficiencies and cost mitigation initiatives as key factors in managing elevated inflation across various inputs [3] - Although cost pressures remain high in several markets, expense growth was described as measured relative to revenues, aiding in the preservation of operating performance [3] Future Outlook - Management expressed cautious confidence in the resilience of international markets, indicating that localized value strategies and operational discipline will continue to stabilize the broader business [4] - As revenues grow on a controlled cost base, international markets are expected to provide steady support to consolidated performance over time [4] Stock Performance and Valuation - McDonald's shares increased by 8.4% over the past year, contrasting with a 1.7% decline in the industry [5] - The company trades at a forward price-to-sales (P/S) multiple of 7.73, significantly higher than the industry average of 3.58, with competitors like Starbucks, Sweetgreen, and Chipotle having P/S multiples of 2.58, 1.23, and 4.06, respectively [9] - The Zacks Consensus Estimate for MCD's 2026 earnings per share has risen, projecting a 10% increase year-over-year, while competitors are expected to see varied growth rates [11][12]