McDonald’s has demonstrated impressive market resilience, posting a 7% stock price gain in 2025 despite a 4% decline in the S&P 500. This outperformance illustrates the defensive nature of the fast-food business and the company’s ability to navigate challenging economic conditions better than most of its competitors.
The firm’s strategic embrace of technology, particularly AI, positions it well for future growth. Implementing AI solutions across its global restaurant network enhances both operational efficiency—and the customer experience too. This couples well with the company’s strong loyalty program that generated over $28 billion in sales over the last year.
Meanwhile, the stock trades at 25.4 times the company’s forward earnings forecast
MCDONALD’S CORP. (New York symbol MCD; www.mcdonalds.com) is the world’s largest fast-food chain with over 43,000 restaurants in 119 countries. It serves a wide variety of food but is best known for its hamburgers and French fries.
Under its “asset light” business model, McDonald’s is responsible for buying the land and then building the restaurants. It also supplies the food and pays for advertising and marketing.
In exchange, franchisees pay an initial fee to McDonald’s, as well as ongoing rental and royalty payments based on a percentage of their sales. They are also responsible for occupancy costs, such as property taxes and maintenance. Franchisees operate approximately 95% of the company’s outlets.
McDonald’s has three main divisions: The U.S. Market; International Operated Markets, which focuses on developed countries outside of the U.S., including Canada, Australia, the U.K.,
France, Germany, Italy, the Netherlands, and Spain; and International Developmental Licensed Markets, mainly developing countries.
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McDonald’s now plans to fuel its future growth by focusing on three pillars it calls “M-C-D”:
1) Maximize our Marketing involves focusing its advertising and promotions on themes that emphasize its well-known brand and the value of its food.
2) Commit to the Core aims to build on its main menu items: burgers, chicken products and coffee.
3) Double Down on the 4Ds expands upon its current plan to boost sales with these four initiatives: Digital involves expanding its online ordering systems; Delivery involves expanding its home delivery service, which became very popular during the pandemic; Drive-Thru involves installing more drive-thru lanes at its existing locations; and Development involves opening new outlets but also adding new formats like takeout-only locations or restaurants offering just coffee and desserts.
McDonald’s Corp.: Earning dip shouldn’t be a concern over the long run
The company reported lower-than-expected revenue for its latest quarter, mainly due to a drop in traffic at its U.S. stores due to an outbreak of E. coli linked to a supplier of onions. However, new menu items and value meal promotions should help boost its U.S. sales. As well, sales at its international locations continue to improve.
In the three months ended December 31, 2024, McDonald’s revenue fell 0.3%, to $6.39 billion from $6.41 billion a year earlier. That missed the consensus forecast of $6.44 billion.
Overall same-store sales fell 0.4%. A 1.4% decline at the U.S. stores offset a 0.1% increase at the International Operated Markets division (Australia, Canada, France, Germany, Italy, the Netherlands, Spain and the U.K.), and a 4.1% gain at the International Developmental Licensed Markets division (mainly outlets in China, Japan, the Middle East and remaining markets).
McDonald’s earnings before unusual items fell 5.1%, to $2.04 billion from $2.15 billion. Due to fewer shares outstanding, per-share earnings declined 4.1%, to $2.83 from $2.95. That matched the consensus estimate.
In 2025, the company plans to open 2,200 new restaurants, including 1,000 in China. Those new outlets should increase this year’s earnings to $12.33 a share. The stock trades at a reasonable 25.4 times that estimate.
McDonald’s also raised your quarterly dividend by 6.0% with the December 2024 payment. Investors now receive $1.77 a share instead of $1.67. The new annual rate of $7.08 yields 2.3%.
Recommendation in Wall Street Stock Forecaster: McDonald’s Corp. is a buy.
