Shares of McDonald’s (MCD) rose about 3.4% in pre-market trading following the burger giant’s healthy beat for the second quarter of fiscal 2025. McDonald’s sales jumped 5% year-over-year to $6.84 billion, surpassing analysts’ consensus of $6.7 billion. Similarly, adjusted earnings per share (EPS) of $3.19 exceeded the consensus forecast of $3.15 and was higher than prior-year quarter’s $2.97 per share.
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Importantly, McDonald’s U.S. sales rebounded, driven by customer-focused promotions. CEO Chris Kempczinski credited the chain’s “compelling value, standout marketing, and menu innovation” for the 6% increase on a constant-currency basis in global Systemwide sales during the quarter.
Details of McDonald’s Q2 Performance
McDonald’s global comparable sales, a key retail metric watched by analysts, grew 3.8% year-over-year. This included a 2.5% rise in the U.S., a 4% jump in International Operated Markets, and a 5.6% increase in International Developmental Licensed Markets. Notably, the fast-food chain’s U.S. comparable sales were on a steady decline in the past two quarters.
The fast-food industry faces a challenging consumer environment. McDonald’s has taken steps to boost its sales and draw consumers of all ages. For instance, the company launched a Happy Meal tied to “A Minecraft Movie” and brought back chicken tenders wrapped in tortillas. Additionally, McDonald’s plans to launch new cold beverages at about 500 outlets starting in September.
During the quarter, MCD paid a dividend of $1.77 per share, totaling $1.3 billion, and repurchased 1.7 million shares of stock for $506 million. MCD stock carries an above-industry-average dividend yield of 2.3%.
According to McDonald’s Key Performance Indicators (KPIs) from Main Street Data, comparable sales growth has significantly slowed since its peak in 2021, with recent declines reflecting macroeconomic challenges.
Is MCD a Good Stock to Buy?
On TipRanks, MCD stock has a Moderate Buy consensus rating based on 10 Buys, nine Holds, and two Sell ratings. The average McDonald’s price target of $340.65 implies 14% upside potential from current levels. Year-to-date, MCD stock has gained 4.3%.
Please note that these ratings were issued before the Q2 report and may change once analysts update their recommendations.
