McDonald’s Corporation

McDonald’s second quarter 2025 results showcased the power of focused execution and strategic initiatives. Total revenue increased 5% to $6.84 billion, or 4% in constant currency terms, reflecting strong operational performance across all business segments. This represents a significant turnaround from the challenging Q1 2025 results, demonstrating the company’s resilience and adaptability.

Operating income grew an impressive 11% to $3.23 billion, or 8% in constant currency terms. Results included pre-tax charges of $43 million primarily related to restructuring charges associated with the “Accelerating the Organization” initiative. Excluding these current year charges, as well as prior year pre-tax charges of $154 million, operating income increased 7% (4% in constant currency), demonstrating strong underlying operational leverage.

Net income for the quarter was $2.25 billion, up 11% year-over-year. This translated to diluted earnings per share of $3.14, a 12% increase from the prior year period (10% in constant currency). Excluding restructuring charges, diluted earnings per share was $3.19, representing a 7% increase (5% in constant currency) when also excluding prior year charges.

The company’s systemwide sales increased 8% (6% in constant currency), reflecting both comparable sales growth and continued restaurant expansion. Systemwide sales to loyalty members across 60 loyalty markets reached approximately $33 billion for the trailing twelve-month period and approximately $9 billion for the quarter, highlighting the continued success of McDonald’s digital transformation strategy.

The strong financial performance was driven by compelling value offerings, effective marketing campaigns, and successful menu innovations that resonated with customers across all markets. This quarter’s results validate McDonald’s strategy of focusing on execution fundamentals while investing in long-term growth drivers.

U.S. segment delivered a significant turnaround with comparable sales increasing 2.5%, representing a remarkable 3.2 percentage point improvement from the -0.7% decline in Q2 2024. The positive performance was primarily driven by check growth, reflecting successful pricing strategies and product mix improvements. The segment benefited from compelling value offerings and effective marketing campaigns that resonated with cost-conscious consumers.

International Operated Markets demonstrated exceptional recovery with 4.0% comparable sales growth, a 5.1 percentage point improvement from the prior year’s -1.1% decline. Notably, all markets within this segment reflected positive comparable sales, indicating broad-based strength across diverse geographic regions. This performance validates the effectiveness of locally adapted strategies and operational improvements.

International Developmental Licensed Markets led growth with 5.6% comparable sales increase, representing the strongest improvement of 6.9 percentage points from the -1.3% decline in Q2 2024. Positive comparable sales were led by Japan, with all geographic regions reflecting positive comparable sales. This segment’s performance highlights the strength of McDonald’s franchise model and the effectiveness of market-specific strategies.

The broad-based positive performance across all segments represents a complete reversal from Q2 2024’s challenging results, demonstrating McDonald’s ability to execute on its strategic priorities. The company’s focus on value leadership, menu innovation, and operational excellence has clearly resonated with customers globally, driving traffic and sales growth across diverse markets and economic conditions.

Revenue performance by segment showed franchised restaurants generating strong results due to higher comparable sales, while company-owned restaurants maintained stable performance. The balance between franchised and company-owned operations continues to provide McDonald’s with operational flexibility and capital efficiency.

McDonald’s loyalty program achieved unprecedented milestones in Q2 2025, further solidifying the company’s position as a leader in digital transformation within the quick-service restaurant industry:

Record-Breaking Loyalty Performance

• Trailing Twelve-Month Sales: Systemwide sales to loyalty members reached approximately $33 billion across 60 loyalty markets
• Quarterly Performance: Loyalty members generated approximately $9 billion in sales during Q2 2025
• Program Scale: Loyalty programs now operate in 60 markets globally, providing comprehensive customer insights
• Growth Trajectory: Sequential growth from $31 billion TTM in Q1 to $33 billion TTM in Q2, representing continued acceleration

The loyalty program’s exceptional performance demonstrates McDonald’s ability to drive customer engagement and frequency through personalized experiences and targeted value offerings. The program has become increasingly sophisticated in its ability to deliver relevant offers and drive incremental visits, contributing significantly to the comparable sales growth across all segments.

Digital Innovation and Technology Investments

McDonald’s continued to leverage technology as a key differentiator, with digital solutions driving operational efficiency and enhanced customer experience. CEO Chris Kempczinski emphasized that “technology investments and ability to scale digital solutions at speed will continue to elevate the McDonald’s experience for customers, crew, and our global System.”

The digital transformation encompasses multiple touchpoints including mobile apps, kiosks, delivery platforms, and drive-thru innovations. These investments are generating measurable returns through increased average check, improved order accuracy, and enhanced customer satisfaction metrics.

The success of the loyalty program across 60 markets demonstrates the global scalability of McDonald’s digital platform and the company’s ability to adapt digital solutions to local market preferences and behaviors. This capability provides a sustainable competitive advantage as the industry continues to evolve toward digital-first customer experiences.

McDonald’s Q2 2025 performance validated the effectiveness of its strategic priorities, which center on delivering compelling value, standout marketing, and menu innovation:

Value Leadership Strategy

• Compelling Value Propositions: Strategic pricing and promotional offerings that resonate with cost-conscious consumers
• Check Growth Management: U.S. segment’s positive performance primarily driven by check growth rather than just traffic
• Localized Value Strategies: Market-specific approaches to value delivery across different economic environments
• Digital-Enhanced Value: Leveraging loyalty program and mobile app to deliver personalized value offerings

Marketing Excellence

McDonald’s marketing strategy successfully drove brand awareness and customer engagement across all markets. The company’s ability to create “standout marketing” that cuts through competitive noise has been instrumental in driving the broad-based comparable sales growth. Marketing investments have focused on highlighting McDonald’s unique value proposition and differentiating the brand in an increasingly competitive landscape.

Menu Innovation

Continued focus on menu innovation has provided customers with new reasons to visit while maintaining the core menu items that define the McDonald’s experience. The balance between innovation and consistency has proven effective in driving both trial and repeat visits across diverse customer segments.

Accelerating the Organization Initiative

The ongoing “Accelerating the Organization” restructuring initiative continued in Q2 2025, with $43 million in pre-tax charges during the quarter. While these investments create short-term cost pressures, they are designed to modernize ways of working and improve long-term operational efficiency. The initiative aims to enhance decision-making speed and organizational agility to better serve customers and support growth.

CEO Chris Kempczinski’s statement that “when we stay focused on executing what matters most to our customers, we grow” encapsulates the company’s strategic philosophy and the results achieved in Q2 2025.

McDonald’s Q2 2025 geographic performance demonstrated the strength of its globally diversified business model, with positive comparable sales across all regions representing a complete turnaround from the challenging Q2 2024 results:

United States Market

The U.S. market showed significant improvement with 2.5% comparable sales growth, driven primarily by positive check growth. This performance reflects successful value positioning and effective promotional strategies that attracted customers despite ongoing economic pressures. The domestic market’s recovery demonstrates McDonald’s ability to adapt its offerings to meet changing consumer preferences and economic conditions.

International Operated Markets

All markets within the International Operated Markets segment reflected positive comparable sales, contributing to the overall 4.0% segment growth. This broad-based strength indicates effective local market strategies and operational improvements across diverse economic and cultural environments. The segment’s performance validates McDonald’s approach of balancing global brand consistency with local market adaptation.

International Developmental Licensed Markets

Led by strong performance in Japan, this segment achieved 5.6% comparable sales growth with all geographic regions reflecting positive comparable sales. The Japan market’s leadership role demonstrates the effectiveness of locally relevant marketing and menu strategies. The universal positive performance across all regions in this segment highlights the strength of McDonald’s franchise model and the capability of local partners to execute growth strategies effectively.

Currency Impact Management

McDonald’s demonstrated effective currency risk management, with reported growth rates of 5% for revenue and 11% for operating income, compared to constant currency growth rates of 4% and 8% respectively. The company’s hedging strategies and natural currency diversification continue to provide stability in volatile foreign exchange environments.

The geographic diversification has proven to be a key strength, allowing McDonald’s to capture growth opportunities across different economic cycles and market conditions while mitigating risks associated with any single market or region.

McDonald’s demonstrated strong operational leverage in Q2 2025, with operating income growing faster than revenue growth, indicating effective cost management and operational efficiency improvements:

Margin Expansion Drivers

• Sales Leverage: Higher sales volumes driving improved fixed cost absorption across the restaurant network
• Franchised Margins: Higher sales-driven franchised margins contributing to overall profitability growth
• Operational Efficiencies: Technology investments and process improvements reducing operational costs
• Scale Benefits: Continued leverage of McDonald’s global scale in procurement and operations

Cost Management Excellence

Despite inflationary pressures in labor and commodity costs, McDonald’s maintained strong margin performance through strategic cost management initiatives. The company’s ability to offset cost inflation through operational efficiencies and strategic pricing demonstrates the strength of its business model and operational capabilities.

Investment in Future Growth

The company continued strategic investments in technology, restaurant modernization, and organizational capabilities. While these investments create short-term cost pressures, they are essential for maintaining competitive advantages and supporting long-term growth. The “Accelerating the Organization” initiative represents a significant investment in organizational capabilities that will enhance long-term operational efficiency.

Franchise Model Benefits

McDonald’s asset-light franchise model continued to provide capital efficiency and operational leverage. The strong performance of franchised restaurants, which represent approximately 95% of McDonald’s locations globally, demonstrates the effectiveness of the franchise partnership model and the alignment of interests between McDonald’s and its franchisees.

The balance between company-owned and franchised operations provides McDonald’s with operational flexibility while maintaining capital efficiency, allowing the company to invest in growth initiatives and return capital to shareholders.