With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

World's Most Admired Companies

Industries included in the sector are food services and hotels and casinos.

Fortune Sector Leaders: Hotels, Restaurants, and Leisure

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

WMAC 2023-McDonalds

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

WMAC-2022-50-Mcdonalds

This year’s Fortune 500 marks the 68th running of the list.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-157-McDonald's

McDonald's is the world's largest fast-food chain by revenue, with nearly 40,000 stores. The company has been hit by the staffing shortages plaguing hourly positions across the country and recently announced it would be raising wages.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune 500 marks the 66th running of the list.

McDonald's service worker

The global fast food chain, which has made changes to its menu in recent years to adapt to consumers seeking healthier food, has more than 38,000 restaurants in over 100 countries.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

Companies on this year's list earned national recognition in at least five different countries worldwide—and as many as 33 countries.

World's Best Companies 2019-McDonald's

World’s 25 Best Workplaces

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

Best Large Workplaces for Women 2018_McDonald's

Employees say: 
 
&nbsp; 
 
"The organization is full of awesome opportunities to continue moving forward as a career!!" 
 
&nbsp; 
 
Read the Great Place to Work review .

100 Best Large Workplaces for Women

Here’s our look at 57 companies that do well by doing good.

Change the World

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

Fortune Global 500

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.6 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 62nd running of the list.

Here’s our look at 50 companies that do well by doing good.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Company Info

Headquarters

Countries where the company was recognized on a GPTW national list

Number of countries

Industry

Employees (Worldwide)

Women In The Organization

% of Women in Management (non-Executive)

% of Women in Executive/Manager Positions

Sector

Current All-Star Rank

Previous All-Star Rank

Industry Rank

Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Strongest Dimension

Years on list

Previous rank

State

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

McDonald’s is one of the largest global fast-food companies with 43,000 restaurants in more than 100 countries. The chain was founded in 1940 by Maurice and Richard McDonald as a drive-thru concept before the siblings reenvisioned the restaurant as a low-cost food option later that decade. In 1954 Ray Kroc discovered the business and in 1955 launched McDonald’s System Inc., later known as the McDonald’s Corp., before buying the business in 1961. McDonald’s launched beverage-focused concept CosMc’s in December 2023, but announced in May 2025 it would close its five remaining locations.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

McDonald's (MCD): Company Profile, Stock Price, News, Rankings

legacy

McDonald's

mcdonald's

Hello, and welcome to McDonald's First Quarter twenty twenty five Investor Conference Call. At the request of McDonald's Corporation, this conference is being recorded. Following today's presentation, there will be a question and answer session for investors. At that time, investors only may ask a question pressing star one on their touch tone phone. I would now like to turn the conference over to Mr.

Dexter Convale, Vice President of Investor Relations for McDonald's Corporation. Mr. Conglay, you may begin.

Good morning, everyone, and thank you for joining us. With me on the call today are Chairman and Chief Executive Officer, Chris Kamczynski and Chief Financial Officer, Ian Borden. As a reminder, the forward looking statements in our earnings release and eight ks filing also apply to our comments on the call today. Both of those documents are available on our website as are reconciliations of any non GAAP financial measures mentioned on today's call, along with their corresponding GAAP measures. Following prepared remarks this morning, we will take your questions.

Please limit yourself to one question and then reenter the queue for any additional questions. Today's conference call is being webcast and is also being recorded for replay via our website. And now I'll turn it over to Chris.

Thanks, Dexter, and good morning, everyone. We entered 2025 knowing that it would be a challenging time for the QSR industry due to macroeconomic uncertainty and pressures weighing on the consumer. During the first quarter, geopolitical tensions added to the economic uncertainty and dampened consumer sentiment more than we expected. We believe McDonald's can weather these difficult conditions better than most as we have proven time and time again and expect to outperform our competitors by harnessing the strength of our brand and the power of our global scale. However, we're not immune to the volatility in the industry or the pressures that our consumers are facing.

Our global comp sales in the first quarter declined by 1%. And while we expected global QSR industry traffic would be down in the first quarter, actual industry traffic fell more than we anticipated in several of our large markets, including The US. The US, overall QSR industry traffic from the low income consumer cohort was down nearly double digits versus the prior year quarter. Unlike a few months ago, QSR traffic from middle income consumers fell nearly as much, a clear indication that the economic pressure on traffic has broadened. However, traffic growth from the high income cohort remained solid, illustrating the divided US economy where low and middle income consumers in particular are being weighed down by the cumulative impact of inflation and heightened anxiety about the economic outlook.

We know that leadership in value and affordability is paramount in an environment like this, and we have been expanding and refining our value proposition to meet the needs of our consumers, especially our low and middle income cohorts, as well as families internationally. Building upon the actions we began to take in 2024, we now have everyday affordable price menus or EDAP and entry level meal bundles in each of our big five international operated markets. As we've said before, these are the building blocks of what good value means to us, pairing an EDAP menu with items priced at compelling entry level price points with strong meal bundles. In early January in The US, we launched our McValue platform, which is a new branded equity similar to the saver menu in The UK and the loose change menu in Australia, both of which have been in place for over ten years. In this environment, we remain focused on the factors within our control, including delivering outstanding operational execution.

We believe the scaled combination of our value platforms, the introduction of innovative new products, and the execution of world class promotional and marketing campaigns provide a compelling offering for our customers, not just bringing them in the door, but offering them the feel good moments they've come to count on from our brand. For example, just a few weeks ago, we launched a marketing campaign in partnership with a Minecraft movie, our largest global campaign yet with participation by more than 100 markets. As part of this campaign, we've combined exclusive digital in app and gaming experiences with in store collectibles for fans young and old through Happy Meals and the core menu inspired Minecraft Movie Meal. We're encouraged by the consumer response to the Minecraft Movie Campaign and by our overall performance in April, which illustrates the benefit of our value platforms working in conjunction with full margin promotions and outstanding marketing execution. We continue to expect our guest count and market share performance will improve from the first quarter low point driven by our emphasis on strong value and affordability execution that we have been addressing.

The introduction of exciting new menu items, such as the nationwide launch of McCrispy Chicken Strips in The U. S, should contribute to this growth. However, we remain cautious about the overall health of the consumer. Before I hand it over to Ian to discuss segment performance, I also wanted to touch on the creation of McDonald's global restaurant experience team. It's significant for two reasons.

First, through the new integrated structure, we'll be able to execute faster, which means ideas can start showing up in our restaurants even sooner. We can achieve and scale cross functional product innovations like Best Burger, Big Arch, and McCrispy faster than ever before with menu, supply chain, operations, and speedy lab teams all in one place. It also increases our ability to develop and scale tech innovation in new ways, such as ready on arrival, Internet of Things enabled restaurant equipment, and Google Cloud connectivity through the eyes of a restaurant general manager to ensure they're all working in coordination with each other. Second, the category structure with dedicated leaders for beef, chicken, and beverages gives us better accountability and a sharper line of sight into what it takes to win in each of these verticals. Increasingly, we're competing against specialists, and so we're bringing a specialist focused into McDonald's.

In beverages, for example, we've discovered some interesting learnings through our COSMICS test, which has better informed our understanding of consumers' customization preferences and interest in new emerging beverage categories. Later this year, in partnership with our franchisees, we'll be launching a beverage test in The US in some of our existing McDonald's restaurants that will incorporate new menu items inspired by cosmetics. We'll share more details on this in the coming months as we continue to test, learn, and position ourselves for growth in this space. As Jill McDonald steps up to lead the restaurant experience team, we welcome Anuj Styart with his rich market perspective and lifelong understanding of customers' needs to the role of president of our international operated market segment. Io Semples, previously president of the international developmental license markets, will now assume responsibility for McDonald's France, which is one of our largest and most important markets globally.

And Dario Baroni, who previously oversaw our midsized IOM markets, will backfill you as our IDL president. I'm immensely proud to see these proven leaders taking on new opportunities in some of our most important roles, demonstrating the depth of talent we possess within our organization. I'll now turn it over to Ian.

Thanks, Chris, and good morning, everyone. Overall, our first quarter financial results reflect the increasingly challenging industry and consumer pressures that Chris mentioned upfront. Against this backdrop, combined with severe weather conditions primarily in North America and the impact of the leap day last year, our first quarter global comp sales declined 1%. Global comp sales were essentially flat when the leap day impact is excluded. In The U.

S, comp sales declined 3.6%, largely reflecting broad based consumer challenges, particularly amongst the lower and middle income cohorts. However, while comparable guest counts also declined versus the prior year, we delivered a positive comp guest count gap to most near end competitors supported by the launch of our McValue platform, which incorporated the $5 meal deal offering, the buy one, add one for a dollar component, and our in app exclusive digital offers. As with our value platforms in other markets, we'll remain agile to ensure McValue continues to meet consumer needs and positions us for success in a challenging marketplace. While we may adjust our current McValue offerings over time, for the remainder of 2025, we'll continue to include everyday value meal deals starting at $5 given how the current $5 meal deal in particular has resonated with customers. In quarter one, we also launched a national marketing campaign celebrating fifty years of breakfast at McDonald's with a national Egg McMuffin Day and expanding the availability of bagel sandwiches nationwide to strengthen our position and drive traffic in this important daypart.

In addition to delivering exciting menu innovation and world class marketing efforts, we remain committed to driving operational excellence and running great restaurants. One key measure for how we are performing is the customers' experience when visiting McDonald's. In the first quarter, we raised our customer satisfaction scores to an all time high in The US. Now turning to our international business. In most of our major markets, we're seeing a similar story in regards to the challenging industry environment and softening consumer sentiment.

In our international operated market segment, comp sales declined 1% versus the prior year quarter. Results were mixed across the individual markets, including negative comps in The UK. QSR industry traffic growth was positive in only two of our big five markets. However, we drove a positive comp guest count gap to most near in competitors across the majority of our largest markets, demonstrating the strength of our value platforms and how they're resonating with consumers. In addition, as in The US, we have also raised our customer satisfaction scores to all time highs in nearly all of the international operated markets, including the big five.

In France, we continued to realize the benefits of our turnaround efforts despite a challenging industry environment. For the first time in nearly three years, we delivered positive market share gains in the quarter, driven by the success of our value offerings, including a €4 happy meal and a value meal partnership with League One. At the March, we also launched a new EDAP menu, featuring a variety of items with price points of under €3. We're complementing these value offerings with strong menu news, such as the recent launch of the Big Arch with positive results, marking another step in the continued expansion of this large satiating burger. In Germany, QSR industry traffic continued to contract in the first quarter, but we drove a positive comp guest count gap to near end competitors and increased market share behind a new comprehensive value offering, McSmart Snacks, which is an e d a p platform.

We now have all aspects of good value and affordability effectively integrated in the market and working in conjunction with meal bundles, which will be complemented with exciting menu and marketing news through the year. In Canada, where QSR industry traffic increased in the first quarter, we delivered both positive comparable sales and guest count performance, driven in part by our $1 coffee offering and our hockey showdown limited time promotion. As a Canadian, I can tell you that Canadians are extremely enthusiastic hockey fans. This passion was evident in the results with the hockey showdown promotion being one of the top performing earned media brand affinity campaigns with over 50,000,000 impressions and driving a lift to the overall sandwich category. And in The UK, where QSR industry traffic declined versus the prior year quarter, we are actively addressing the opportunities that are within our control.

We understand what it takes to succeed in The UK market, which continues to build upon their value and affordability foundation, and we remain confident in our ability to revitalize the business by improving our execution and leveraging successful strategies from other markets. And lastly, to round out the big five, in Australia, we are making progress despite declining QSR industry traffic. With a new managing director in place, we look forward to seeing our momentum built. Finally, in our international developmental license markets, comp sales for the quarter were up 3.5%, largely driven by positive results in The Middle East and Japan. And in China, our performance remained stable, driven by an increase in delivery share, the success of the Big Vites value meal and strong performance in chicken.

Turning to the P and L. Adjusted earnings per share were $2.67 for the quarter, which includes a zero four dollars headwind from foreign currency translation. Adjusted earnings per share increased by 1% compared to the prior year in constant currencies. Despite the challenging market conditions, top line results generated over $3,300,000,000 of restaurant margins for the quarter, and adjusted operating margin was about 45.5, highlighting the durability of our business model. Results for the quarter included lower company operated margins, reflecting pressured top line results and commodity inflation, particularly in Europe.

This was partially offset by lower G and A spend, which was primarily driven by the timing of investment and the comparison to prior year costs related to our biannual worldwide convention. We remain focused on optimizing our run the business spend as we continue to invest in our strategic growth priorities such as digital and technology and our transformation efforts led by our global business services organization that will drive long term efficiency. With respect to the remainder of the year, while we remain cautious about consumer sentiment, we are reaffirming our full year 2025 financial targets that we outlined in February, which include the impact from tariffs that are currently in place. We expect foreign currency translation to be a tailwind to 2025 earnings per share of about $05 per share based on current exchange rates. That's a significant change versus our previous estimated headwind of $0.20 to $0.30 per share, reflecting the recent weakening of the U.

S. Dollar versus major currencies. As always, this is directional guidance only as rates will likely change as the year progresses. Despite the ongoing industry headwinds, we know that McDonald's is well positioned to succeed due to the resiliency of our business and our overall financial strength, and we remain confident in our ability to deliver long term profitable growth for the system and to create value for our shareholders. And with that, let me turn it back over to Chris.

Thanks, Ian. A couple weeks ago, McDonald's top leaders from around the world gathered in Hyderabad, India to discuss the path forward on our strategic priorities. We're clear on the enablers of our Accelerating the Arches growth strategy and specifically our commitments to sustaining leadership on value and affordability, capitalizing on our new category teams to strengthen customers' taste perceptions of our food and accelerate menu innovation, ensuring restaurants deliver feel good experiences where customers keep coming back and employees are excited to work, and continuing to lead with our values as the foundation of how we do business. After meetings like this, I'm always impressed by the strength and resilience of McDonald's three legged stool. It was yet another reminder of the ways our dedicated franchisees, hardworking crew, and arguably the best global supply chain in the world come together to make sure the golden arches shine brightest for our customers even during challenging times.

It's a defining feature of our system. Our commitment to serving local communities is not just our mission. It's the essence of our franchisee model. We're a global brand, but an incredibly local business. Thousands of franchisees running our restaurants have a deep connection to the communities they serve and a keen sense of how we can bring the most positive impact and add the most value.

In most communities, if not markets where we operate, McDonald's and its franchisees is one of the largest employers. When it comes to providing quality ingredients, we prioritize sourcing from local farmers and suppliers to serve the food our customers love most. While we anticipate that the economic environment will remain challenging in the near term, I'm confident that our Accelerating the Arches strategy is fit to drive guest count led growth and market share gains and maximize our MCD growth pillars for the long term. It's a strategy that's rooted in our customer insights and built on our inherent competitive advantages, and it's the playbook we need to regain form in 2025. Just a couple weeks ago, we marked McDonald's seventieth anniversary.

In celebrating longevity, we're actually honoring leadership. Seven years of setting the standard for innovation, pioneering the drive through, advancing our menu, and embracing digital transformation to build the best restaurant experience. Time and again, we've proven that our foundation is strong, our commitment to customers unwavering, and our ambition to lead unparalleled. This business has demonstrated an innate ability to anticipate and respond to change. Our agility has always been a key strength now more than ever, and it gives us confidence in the future even amid macroeconomic uncertainty.

We'll stay true to what makes us uniquely McDonald's, great food, exceptional value, and an inclusive environment that welcomes all. Thanks to the strength of our system, McDonald's is well positioned to seize the opportunities before us and keep shaping the future of our industry. With that, we'll take questions.

Thank you. And as a reminder, if you are an investor and would like to ask a question, please press star followed by the number one on your telephone keypad. We ask that you limit yourself to one question and re queue for any additional questions.

Our first question is from Dennis Geiger.

Thank you. Thank you. Good morning, guys. I wanted to ask a bit more about The US and what sounds like an encouraging response to the Minecraft marketing campaign and to your value platforms into the second quarter. Recognizing the consumer is pressured, but also that select 1Q headwinds have abated maybe a bit, could you talk a little more about how you're thinking about your recent U.

S. Sales trajectory, underlying momentum looking ahead over the coming quarters, given some of the exciting marketing and menu news and the overall execution that you touched on? Thank you.

Hi, Dennis. It's Chris. Yeah, I think the year is evolving as we expect it would. We we knew that in q one, it

about getting our McValue menu embedded, getting consumers aware of that, and then we were gonna be introducing marketing news in q two that was gonna also soon be followed by menu news. And so Q1 was, for us, always going to be sort of the toughest quarter in the year, and then we're expecting to see momentum build as the year progressed. As we mentioned in the opening comments, we were really encouraged by our Minecraft promotion globally. In The US, this was planned to be a four week promotion, and I think we ended up selling out of of the Minecraft collectibles within ten days to to fourteen days. So the response exceeded certainly what we were planning for.

And then we've just started doing the soft sell of our chicken strips, our McCrispy chicken strips. Advertising hasn't yet started on that, but we're seeing in the restaurants that are selling strips a nice take rate on that as well. So, you know, I think how we sort of expected the year, it's evolving that way. The key for us now for the balance of the year is about execution. And you've got it in an environment where there there is a pressured consumer.

You've got to simply out execute your competitors, and that means you've got to out execute them on your value programs. You've got to out execute them when it comes to marketing and menu innovation. And I think we've seen plenty of evidence that when you do that, there's growth out there to be had. But, certainly, if your execution isn't sharp in a challenge environment, you're not gonna be able to expect growth. And so that's, I think, where we're focused right now is about making sure we do world class execution.

Our next question is from David Palmer from Evercore.

Thanks. I'm wondering if you can give us some color about some of your key IOM countries. And in what ways are the consumer economic dynamics and McDonald's value perception different today, the challenge is different than than what we see in The US? It it sounds like so far in this earning season, like, that the global consumer companies, whether it's the informal eating out market or the instant consumable guys, are doing a little bit better overseas than you would have thought. Seems to be fairly firm in terms of consumer backdrop, but, you know, I I I don't know how you feel about that for your key markets.

So any sort of juxtaposition to The US would would be helpful. Thanks.

Yeah. I I think generally, David, that that's a fair characterization. If if I were to kinda just do a survey, of the world, I think Europe, it's really country by country. As Ian mentioned, there's only two countries that we've actually seen industry growth. But I think, generally, we feel good about the value programs that we have in place in all big all of our big five markets.

And we're seeing that, you know, when you pair that with good with good menu and marketing execution, you can see great performance or very good performance. So I think, you know, Europe challenged. But again, if you have the right value in marketing, you can get that. I think the issue in Europe, maybe a little bit different than The US, it's just it's a very inflationary environment in Europe, particularly because of beef. And so you've got high single digit inflation running through the P and L because of what's going on in Europe.

That compares to The US where F and P inflation is low single digits. So it's a more inflationary environment in Europe, which means we just have to be really judicious about how and where we take pricing in that environment. I think as Ian mentioned, in China, we've seen the business stabilize there. We're encouraged by what we're seeing from our China business. Latin America, I think, continues to perform okay.

And then if you go to places like Japan, the business is performing solidly there. I think relative to The U. S, The U. S. And the pressure on that lower income consumer is probably the most noteworthy thing.

Seeing traffic declines of nearly 10% with that low income consumer, I think, is the defining feature of what we see in The U. S. Relative to rest of the world.

I may just add a couple of comments to what the context that Chris has outlaid, and I'll just use our big five IOM markets as a bit of a bellwether because, obviously, it's just building on what Chris laid out. But I mean, I think it's certainly, there's still challenge in our industry, obviously, in particular. I think just with lower income consumers and and families, which are a big part, as you know, of our international business. I think there are pressures there. I think what we feel obviously, as you've heard us talk a lot about what we're focused on is what's within our control, and we feel really good as you heard us talk about upfront in the fact that in those big five markets, we've now got through the fourth first quarter the essential components of strong value in place in each of those big five markets with EDAP programs and then entry level meal bundles.

And so I think despite the fact that in three of those five markets, we're seeing continuing to see a contracting industry, traffic, we're taking share in the majority of those markets because I think we're starting to see those value platforms work. And as Chris said, when you combine that, and I'll use France as the example with kinda new and exciting menu news, like the big Arch launch, which happened in France in early April, and we're seeing some good, early results there, you you start providing those reasons, for consumers to visit. So, again, it's certainly not an easy landscape, but we certainly feel like the business is well positioned on the back of the work that we did through, '24 and into the beginning of this quarter.

Our next question is from David Tarantino from Baird.

Hi, good morning. My question is on The U. S. MIC value platform. And I was hoping maybe you can elaborate on how you think the current construct of that value is working in the current environment and whether you think adjustments are needed.

And and I guess the nature of my question is when you think back to the last kinda major downturn in in consumer spending, you had the dollar menu in place and that worked quite well and allowed for significant share gains. So I'm wondering if you need sharper entry level price points on the value menu in today's environment.

Thanks for the question, David. Just as background, so the introduction of McValue, as you'll recall, was about getting a branded platform established that we expect to sustain over time. And and the point of that was to allow for flexibility, to allow for us over time to change the individual items within that based on what we're seeing from a competitive set, based on what we're seeing in terms of of consumer responsiveness, etcetera. So it's it's designed to be agile. As you think about McValue, we feel really good about how the $5 meal deal is performing.

And Ian talked about in his comments the fact that there's alignment in The US system that that $5 meal is going to continue through the balance of the year. There may be some additional meal at different price points to get offered on top of that. But at a $5 meal, there's continuing for the balance of the year. I think when you look at the buy one, add one for a dollar, I'd say our view on that is it's performing okay, but frankly, it's not driving nearly the amount of incrementality that we're seeing with the buy one or with the $5 meal deal. And at the end of the day, value programs the the ultimate barometer for performance of a value program is its ability to drive incrementality, and we're seeing incrementality for for the meal deal, you know, thirteen, twelve points higher than what we're seeing with the buy one, add one for $1 The buy one, add one for $1 Certainly, there's a strong take rate, but it's not driving as much incrementality.

And so I think this is a question for The US team with franchisees is any value program requires an investment of margin dollars to get that established. And is the buy one, add one for a dollar the best investment of margin dollars? I think there's probably an opportunity to look for greater incrementality, but that's going to be a conversation that happens in The US. And, as to any pivots, you know, that, I think time will tell on that.

Our next question is from Brian Harbour of Morgan Stanley.

Yes. Thank you. Good morning. Maybe just on that topic, I think you're still running something like mid single digit menu pricing in in The US. And obviously, I know you don't control that, but, you know, I I wonder is that kinda continues to go up, but then you talk you talk more about the value platform and then you maybe put more items on it.

I mean, does that sort of does this the spread between the different sides of the menu become a problem? Do you think there is is gonna be sort of like continued negative mix shift as you talk more about value? I I don't know if maybe, you know, innovation is a is a way to solve that because you can sort of introduce items that that are at a lower price point. I mean, maybe maybe strips kind of fit that mold. But how do you think about that dynamic, you know, kind of over the the medium to longer term?

Sure. Well, it's certainly something that you need to be mindful of. We're always taking a look at it. I think part of what we've described here is you've got to have strong value and affordability programs, but they have to be paired with great full margin marketing and menu innovation. And that when you do the two of those in combination, you get an outcome or result that is positive for the franchisee P and L, positive for our P and L, etcetera.

I think, you know, what what you're talking about there in terms of trade and and how we think about F and P inflation, you have to just be very disciplined on these things. And I think one of the things that that we spend a lot of time with our franchisees on is looking at pass through rates, making sure that we're being judicious about how and where we take pricing. And I think there's been a lot of good progress, on that. And then as you think about other incremental programs that you may need to do, certainly, we test those. We'll we'll do different modeling on those to make sure that in total, that the P and L works.

I think you can't really decompose and take each individual item. You have to look at it in totality and say, does this this program work for our franchisees, for the company? But Ian, I don't know if you have anything else you wanna add to that.

Yeah. Brian, morning. Just maybe a couple things I'd add. I mean, you're you're you're right if we use The US as the example that, you know, menu pricing, obviously, as you would expect, inflation's been coming down, and I think we were just under mid single digit in q one. Most of that, frankly, was carryover from, price taken in in 2024.

So assuming inflation keeps coming down, I would expect the contribution from price to kind of continue to to moderate in in line with that. As Chris said, I mean, obviously, with what we've been doing in The US, and we're kind of in this noncomparable period, is we we've obviously responded to the kind of needs of the consumer, and we've put stronger value and affordability in place. If you remember, the $5 meal went in place at the June in in 2024. And so there certainly is until we kinda get more comparable. There is a bit of a mix adjustment.

Obviously, the purpose of that mix adjustment, as Chris was talking to, is we wanna drive stronger underlying momentum in the business. We wanna drive guest count led growth. And then as you get that guest count led growth and you start complementing that with things like Minecraft or chicken strips, you get the check growth, the profit growth, which is obviously, the the kind of total outcome that you're looking for. But I think until we get to quarter three this year, you're gonna continue to see a bit of that mix play, in check and and margin, until we get more comparable.

Our next question is from Andrew Charles from TD Cowen.

Great. Thank you. Ian, last quarter, talked about moderate US same store sales embedded within your 2025 US McCobko outlook. And I'm curious just following 1Q's challenged performance and your cautious view on the consumer, but couple that with the sharp improvement in April sales, if moderate U. S.

Same store sales growth still holds for 2025, where has your embedded assumption changed? And maybe just quickly, if you could also touch on your expectations for 2025 US MCOPCO margins, that would also be helpful.

Yeah. I I think good morning, Andrew. I think what I would what I would say is, I think on margins, I think we continue to believe, if we use Macapko margins as the as the example in The US, for this year, for the total year on a percentage basis, we expect to be slightly up, on a percentage basis versus where we were in in 2024. Obviously, as we've talked about a fair bit this morning, there's still a fair bit of uncertainty, in the external environment. And as we've talked about, we're obviously focused on what we can control.

We feel really good about the lineup of activities that The US business and The US system have got for the rest of the year, including things, obviously, like Minecraft and and, chicken strips, which are are coming to life over the next few days. But the environment around us is uncertain. And as as you've heard me say many times before, obviously, margin growth ultimately is gonna be driven by strong top line growth. And, obviously, that's what we're working hard in regards to the things that are within our control to deliver over the remainder of the year.

Our next question is from Sarah Sensor from Bank of America.

Great. Thank you. I guess one maybe one clarification and a question. The clarification was on The UK. I know that's been historically a a very strong business for you, and I couldn't tell if if you that was one of the markets where you were taking share.

And and if not, if if there was any role of of new competition that might be that might be affecting you. And then the the question is on The US. Like, do you have a sense whether those declines in the QSR traffic maybe are coming because people are shifting into other segments? I asked because I think there's a view that maybe the gap between, you know, QSR value and other segments, whether it's fast casual or full service, has narrowed. So I didn't know if that was a a, you know, just maybe a a intra industry share shift.

Yeah. Hi, Sarah. To The UK, The UK is not yet, gaining share. So there's still work for us, to do in The UK. I'd say, the the share losses are to the people that we should be beating.

So I don't think that new competitors are the the issue that we need to focus on in The UK. It's about our our execution and just doing a better job in that market. So that's The UK. As it relates to The US, just the relative size of the QSR industry versus fast casual, for example, or casual dine, the math just doesn't work. I mean, the gains that you might see with with a couple of the players in casual dine are dwarf relative to the size of the QSR industry.

So I don't think it's it's really accurate to say that this is just a a shift amongst the different components. I think we are seeing that people are just being more judicious about cutting back on visits. And so what you're seeing is you're seeing a decline in frequency where perhaps morning, which is usually, I think, a bellwether daypart occasion, morning now is a is a place that you're seeing people are choosing either to skip breakfast or or they're choosing to eat at home for breakfast. And I think that's more to explain what's going on in The US versus any kind of segment shift.

Hey, Sarah. It's Ian. Maybe just a couple of points of texture to to build on what Chris, has mentioned. I think in The UK, as he said, I mean, I think we clearly believe we've got opportunities that are within our control from an execution standpoint. We've got work to do there.

I would just point a little bit to to France. I think UK is a much narrower set of of, opportunities to address. But I think if you think of the complexity of challenge we've had in France, the progress we've made, I think that gives us, a lot of confidence in our ability to translate, you know, the appropriate learnings and and get our UK business back to where we expect it to be. On on The US, just to kinda emphasize what Chris said, I mean, I the the big thing is is people are just visiting less, and that speaks to, I think, the pressure on consumers, consumer sentiment, obviously, the the things that we've been talking about for a while now, inflationary pressures, interest rates that are weighing, obviously, particularly on lower consumers, and that's spilling over, into middle income consumers right now. And I think, you know, when we get value and affordability right, like the $5 meal as we've talked about before, we know that is bringing consumers back in, to visit us.

And we know when they buy something like the $5 meal, they're visiting us more frequently. And so if we we know if we can get value and affordability right, we can, win in the context of what's going on in the marketplace.

Our next question is from Jon Tower of Citi.

Great. Good morning. Thanks for taking the question. You you'd mentioned, Chris, earlier, you know, expanding a beverage test. And I was curious if you could dig into that opportunity a little bit more, perhaps, you know, what you're expecting from this over time?

Are there investments you're anticipating the franchisees will need to make on an equipment side? And and frankly, you know, what how you see positioning this platform for the company over time? Do you see this as a full margin product or perhaps playing on the value front as well? Just maybe sizing up the opportunity and how you see it being communicated to the consumer over time.

Sure. Well, I I think as as we look at the the opportunity from a macro perspective, there's a lot of growth that we see in beverages, and, the profitability of beverages, is very attractive. So when think about profit pool growth in the industry, we expect beverages is gonna be a place, where there's significant growth in the profit pool. And we're frankly, we think there's more that we can be doing to capture our fair share of that. You know, we capture on on coffee, for example.

You know, we're probably roughly around 10% of the coffee share. We think we can do be be doing better than that. And then there's growth in other places where you're seeing energy and and some other areas that are also strong growth where we don't participate at all. And so, you know, when we think about that, we think there's a lot that we can do. Part of what we've tried to be thinking through is how do we get after that opportunity.

And part of the impetus for us to go do Cosmix was, a belief that that if we try to do it within an existing restaurant that the complexity may be, too great and would impact speed of service and some other things. And so the thought was, you know, do we need to maybe look at quarantining the complexity in a in a stand alone concept like we did with CosMICS? And one of the things I think there's two big things that we've learned out of CosMICS, which are informing the next phase of learning here. The first is that while there is some customization, actually, 80%, of the order that the consumer wants it to be recipe. So this is not sort of give me a blank slate and I'm gonna, you know, design endless customization.

80% of it is recipe, and then there's some customization that goes on the end. So the complexity or the risk of complexity, as we've discovered with COSMICS, isn't as great as what we thought it would be. I think the other thing that we've learned on Cosmics is anytime it has a McDonald's brand attached to it, the consumer is going to wanna buy food with that. And so versus some others that are largely food or or largely beverage dominated concepts, food is still going to always be an important part of whatever our beverage offering is because that's consumer's expectation for the McDonald's brand. And so all of that is informed now.

Let's take that into a McDonald's restaurant and see what an expanded lineup of beverages could look like, and let's understand, you know, what that means in terms of driving incremental traffic, but also food attachment that goes with that. So as to the ultimate investment that's going to be required, I don't think we know because we don't know the answer yet, but we're going to continue to test and learn. And what I do know is is that we're committed to going after beverages. It's part of why we set up beverages as one of our key three category structures just because of the opportunity that we see there.

The next question is from John Ivankoe from JPMorgan.

Hi. Thank you. A two parter, if I may. You know, firstly, it's it's fairly apparent, you know, looking around the country, you know, the amount of core menu pricing difference that you have. And, you know, obviously, I understand all the different economic and competitive reasons for that, but the reality is that there's not a lot of price certainty specifically around the core menu.

So do you think that that is an opportunity? Is it a risk? I mean, if you were to pull, you know, menu menus in certain places down. So just, you know, do talk about, you know, core menu price certainty and, whether that makes sense to drive that. And, you know, secondly, you know, the boneless chicken market is changed actually quite significantly from the last time you had Chicken Select.

So, you know, if you can kind of comment on, you know, your the rate of success that you're expecting from this version of McCrispy maybe versus, you know, what you had before when the, competitive market was in fact different? Thank you.

Sure. Well, at at the end of the day, pricing is an inherently local, decision, and it's informed by the trading area that exists around each of our individual restaurants. And and our commitment and the focus is we need to make sure that relative to the trading area that we're competing in that we're offering strong value. And that's what shows up on both the menu board and that also shows up with the promotions and digital offers that we're running. So, you know, I think about it less as around having predictability across the country around, you know, a common menu, and it's more about we need be competitive within the trading areas that we're competing.

I think if you look at what's been going on with with menu prices right now, because the inflation has come down and we're not nearly seeing as inflationary an environment as we saw certainly last year and into 2023, you're not seeing the big moves on core menu that you saw previously. And I would expect that that's going to continue. As I mentioned, and P inflation is low single digits. So there's not a lot of pressure on that. And I think our franchisees also recognize how important it is for us to stay disciplined on this, and we look at pass through rates, as I described earlier, to make sure that we understand the consumer's willingness to accept any pricing.

So that would be my comment on that. As to the you know, how the market's changed, certainly, there's been a ton of growth in that space. And it's an area that we're hearing from our customers that they're looking for us to have a great offering there, and they're thinking about other ways that we can participate in that market. And so we've talked about ChickenScripps is going to be our first sort of reentry in that. We feel excited about doing it under the McCrispy platform.

We think we can get a halo benefit that's associated with that. And then we've also set up that McCrispy, once you have the strips in, strips is going to allow for us to reintroduce snack wraps, which is going to be coming later in the year as well. So I think for us, it's just the market continues to show the consumer is interested in this product. We want to make sure that we're meeting our customers' needs on that. And I think what we've got with both strips and then later with snack wraps is going to be a great addition to the menu.

Our next question is from Lauren Silberman from Deutsche Bank.

McDonald's (MCD) Q1 2025 Earnings Call Transcript

Company Participants