tapebrief
MCD · Q1 2026

MCD · Q2 2026 Earnings

Cautious

McDonald's

Reported August 4, 2026

30-second summary

U.S. comparable sales printed just +0.8% against the Minecraft promotion lap — barely positive, exactly the "meaningful deceleration" management flagged in Q1, and the weakest U.S. comp in the four-quarter arc. Revenue of $7.10B missed consensus by 0.4% and EPS non-GAAP of $3.38 landed only modestly above the $3.32 GAAP print. The offsetting signal: H1 non-GAAP operating margin came in at 46.9% (implied Q2 GAAP ~47.0%) — sitting within the FY "mid-to-high 40%" range — and every FY2026 guidance line was reaffirmed, alongside a restated 50,000-unit target by 2028.

Headline numbers

EPS

Q2 FY2026

$3.38

0.0% vs est.

Revenue

Q2 FY2026

$7.10B

+4.0% YoY

-0.4% vs est.

Operating margin

Q2 FY2026

47.0%

Key financials

Q2 FY2026
MetricQ2 FY2026Q2 FY2025YoYQ1 FY2026QoQ
Revenue$7.10B$6.84B+3.7%$6.52B+8.9%
EPS$3.38$3.19+6.0%$2.83+19.4%
Operating margin47.0%47.2%-20bps45.3%+170bps

Guidance

Guidance broadly unchanged quarter-over-quarter; all FY2026 operating metrics reaffirmed with Q2 operating margin of 47% exceeding mid-to-high 40% guidance range.

Guidance is issued for both next quarter and the full year. Both may appear below.

Reaffirmed unchanged this quarter: Net restaurant unit expansion contribution to Systemwide sales growth (approximately 2.5% in constant currencies), SG&A expenses as percent of Systemwide sales (about 2.2%), Operating margin percent (mid-to-high 40% range), Interest expense growth (increase between 4% and 6%), Effective income tax rate (between 21% and 23%), Capital expenditures ($3.7 to $3.9 billion), Restaurant openings (approximately 2,600 restaurants globally, about 750 in U.S. and International Operated Markets, 1,800+ from developmental licensees), Net restaurant additions (approximately 2,100 in 2026, targeting 50,000 global units in 2028), Free cash flow conversion rate (low-to-mid 80% range)

Segment performance

Q2 FY2026
SegmentQ2 FY2026Q2 FY2025YoY
U.S. Franchised Revenues$1.942B—+2.0%
International Operated Markets Franchised Revenues$1.936B—+5.0%
International Developmental Licensed Markets & Corporate Franchised Revenues$0.515B—+9.0%
U.S. Company-owned and Operated Sales$0.784B—-1.0%
International Operated Markets Company-owned and Operated Sales$1.607B—+3.0%
International Developmental Licensed Markets & Corporate Company-owned and Operated Sales$0.133B—+30.0%

Platform metrics

Q2 FY2026
SegmentQ2 FY2026Q2 FY2025YoY
Systemwide Sales Growth5%8%—
Comparable Sales Growth1.3%3.8%—
U.S. Comparable Sales0.8%——
International Operated Markets Comparable Sales1.5%——
Franchised Sales Growth5%9%—
Systemwide Restaurants46,028——

Profitability

Q2 FY2026
SegmentQ2 FY2026Q2 FY2025YoY
Operating Margin47.0%——
Franchised Restaurant Margins Growth4%——

Other KPIs

Q2 FY2026
SegmentQ2 FY2026Q2 FY2025YoY
U.S. Geographic Revenue$2.726B—+1.0%
International Operated Markets Geographic Revenue$3.543B—+4.0%

Management tone

Transcript not available; tone analysis is skipped this quarter. Cross-quarter management commentary will resume with the Q3 FY2026 brief.

Answers to last quarter's watch list

Whether Q2 FY2026 U.S. comps print negative against the Minecraft lap — Narrowly avoided negative. U.S. comps printed +0.8% for the full quarter, positive but the softest U.S. read in the four-quarter arc. Global comps of +1.3% confirmed the deceleration was broad-based, not just U.S.-specific. The two-year stack framing management previewed in Q1 cannot be verified without transcript commentary.
Continue monitoring
Whether the September Investor Day reveals a concrete re-franchising program for U.S. company-operated stores — Not yet resolved; the Investor Day falls after this print. What the Q2 data does show is that U.S. Company-operated sales printed -1% against +2% U.S. franchised revenue growth. The pressure on the September event has increased, not decreased.
Continue monitoring
Whether Q2 FY2026 non-GAAP operating margin continues to expand YoY — H1 FY2026 non-GAAP operating margin of 46.9% compares to H1 FY2025 non-GAAP of 46.8% (+10bps YoY, both six-month figures). The press release does not disclose a stand-alone Q2 non-GAAP margin; the implied Q2 GAAP margin (op income / revenue) is ~47.0%. Full quarterly YoY margin resolution requires the 10-Q disclosure.
Continue monitoring
Whether the FX EPS tailwind guidance ($0.20–0.30) holds or moves as rates evolve — Not addressed in the press release; the FX tailwind quantification was not repeated in the FY2026 outlook disclosure this quarter. Q2 FX added $0.03 to EPS and H1 FX added $0.17. Absent transcript commentary, the status of any prior FX EPS framing is unclear.
Continue monitoring
Whether U.S. franchisee cash flow holds in 2026 as corporate EVM support fully ceases — Not addressed on the print. Franchised restaurant margin dollars grew +4% and U.S. franchised revenue grew +2% against U.S. comps of +0.8%, which suggests franchisee-level economics did not deteriorate meaningfully in the quarter — but the direct cash-flow read requires management commentary.
Continue monitoring

What to watch into next quarter

Whether the September Investor Day announces a specific re-franchising program for U.S. company-operated stores — U.S. McOpCo sales are now down against positive U.S. franchised growth; absent a portfolio plan, the "not acceptable" language from Q1 becomes rhetoric without follow-through

Whether Q3 FY2026 U.S. comps re-accelerate — a Q3 FY2026 print that fails to recover off the Minecraft-inflated Q2 base would signal the deceleration is not lap-driven but underlying

Whether the H1 non-GAAP operating margin (46.9%) holds or expands in H2 — H1 sits +10bps above H1 FY2025's 46.8%; any sequential erosion in H2 would put the "mid-to-high 40%" FY commitment closer to the low end of the range

Whether the 50,000-unit-by-2028 anchor gets a capital-intensity disclosure at the Investor Day — the target implies a meaningful step-up in net additions across 2027–2028 combined against the ~2,100 pace guided for 2026; the capex profile required to hit it has not yet been quantified

Whether IOM comparable sales stay above +1% — IOM at +1.5% in Q2 is a meaningful step-down in the segment that has been carrying the system; a sub-1% print in Q3 would remove the last leg of positive-comp momentum

Sources

  1. McDonald's Q2 FY2026 8-K / Earnings Release (Exhibit 99.2): https://www.sec.gov/Archives/edgar/data/63908/000006390826000067/exhibit992-6302026.htm
  2. McDonald's Q1 FY2026 8-K / Earnings Release (for prior guidance baseline and watch-list resolution)
  3. McDonald's Q4 FY2025 8-K / Earnings Release (for FY2026 baseline framework)

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