McDonald’s posted a steady Q3 2025, with global comparable sales up 3.6%, including 2.4% growth in the U.S. and more robust gains of about 4–5% across its international segments, reflecting resilient consumer demand despite a pressured spending backdrop. Systemwide sales rose 8% (6% in constant currency), again underscoring the strength of the company’s franchise-driven model. Revenue increased roughly 3% (1% in constant currency), while diluted EPS came in at $3.18, up about 2% year-over-year; excluding restructuring charges, adjusted EPS was $3.22, essentially flat on a constant-currency basis.
The company anticipates that its results will be stronger in the second half of the year, particularly as the chain faces easier comparisons in the fourth quarter to the fallout from last year’s E. coli outbreak.
McDonald's is poised to focus on value and affordability in 2025, aiming to recapture market share among low-income consumers through menu innovation and strategic marketing initiatives. It remains committed to expanding its global footprint with approximately 2,200 new restaurant openings, including 25% in the mature markets of the U.S. Looking ahead, McDonald's is targeting an operating margin in the mid-to-high 40% range for 2025. For context, the company's operating margins fell to 45.2% in FY 2024 compared to 45.7% in FY 2023. Importantly, McDonald’s is targeting a free-cash-flow conversion rate in the low-to-mid 80% range in 2025, even as it ramps up its investments. Looking further ahead, the company’s long-term ambition includes around 4–5% annual unit growth, aiming for 50,000 global restaurants by 2027, while pushing its free-cash-flow conversion closer to 90% over time.
McDonald’s is working with its U.S. franchisees on ways to make its core menu items more affordable, beyond the $5 meal deal it rolled out last summer and the newer Daily Double burger promotion. Reengaging the low-income consumer is critical, as they typically visit its restaurants more frequently than middle- and high-income consumers.
In Q2, the burger chain’s U.S. sales received a boost from a tie-in meal with the “Minecraft” movie and the launch of the McCrispy Chicken Strips. Shortly after the quarter ended, Snack Wraps returned to menus for the first time in nine years; executives said that early results are “encouraging,” and franchisees have voted to maintain the $2.99 promotional price through the end of the year. Outside the U.S., demand for its Big Macs and French Fries was even stronger.
Below are key drivers of McDonald's value that present opportunities for upside or downside to the current Trefis price estimate:
The company franchises and operates McDonald’s restaurants, which serve a locally relevant menu of quality food and beverages in communities across more than 100 countries. Approximately 95% of the restaurants at year-end 2024 were franchised, including 95% in the U.S., 89% in the International Operated Markets segment and 99% in the International Developmental Licensed Markets segment.
McDonald's essentially offers a uniform menu, though with minor variations to suit the local taste. A typical McDonald's menu includes burgers, sandwiches, salads, snacks, breakfast sandwiches (McMuffins), beverages (soft drinks, coffee, milkshakes, juices), and desserts (ice cream, pies, smoothies).
McDonald's competes primarily with Wendy's and Burger King in the hamburger fast food category. It competes with Starbucks through McCafe.
McCafe represents McDonald's foray into the high-margin caffeinated beverages market dominated by premium coffee chain Starbucks. McDonald's has been able to keep the prices competitive and margins healthy due to its excellent store network, marketing muscle, and highly efficient supply chain. McCafe's menu has been extended to more than coffee and now includes fruit smoothies, mocha, and chocolate shakes.
The breakfast market is proving to be a profitable segment, especially in the U.S. McDonald's is the dominant player in the breakfast segment with a market share of over 40%. McDonald's ensures new items are added to the breakfast menu regularly. However, it now faces serious competition as a number of rivals such as Dunkin' Brands, Restaurant Brands International, Taco Bell, and Starbucks have stepped up their game in the breakfast segment. Starbucks is in the process of reinvigorating its breakfast menu with the help of baked goodies launched under the La Boulange brand. Restaurant Brands International houses two well-renowned brands: Burger King and Tim Hortons, both of which already have a strong presence in the breakfast market. Dunkin' Donuts has also revamped its breakfast menu to cater to the needs of its customers.
McDonald's is in the process of converting its stores into "Experience Of The Future" restaurants, providing technological convenience to its customers. The company's focus on balancing its innovative gourmet offerings to attract millennials with its value focus to retain existing customers is likely to drive growth in the future.
