McDonald’s Corporation (NYSE: MCD) Q4 2025 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Unidentified Speaker
Christopher John Kempczinski — Chief Executive Officer
Ian Borden — Chief Financial Officer
Dexter Congbalay — Vice President of Investor Relations
Jill McDonald — Global Chief Restaurant Experience Officer
Analysts:
Dennis Geiger — Analyst
Sara Senatore — Analyst
Brian Harbour — Analyst
David Palmer — Analyst
John Ivankoe — Analyst
David Tarantino — Analyst
Gregory Francfort — Analyst
Andy Barish — Analyst
Lauren Silverman — Analyst
Jon Tower — Analyst
Jeff Bernstein — Analyst
Presentation:
operator
Hello and welcome to McDonald’s fourth quarter 2025 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 by pressing Star one on their touch tone telephone. I would now like to turn the conference over to Mr. Dexter Kombale, Vice President of Investor Relations for McDonald’s Corporation. Mr. Kambale, you may begin.
Dexter Congbalay — Vice President of Investor Relations
Good afternoon everyone and thank you for joining us. With me on the call today are Chairman and Chief Executive Officer Chris Kamchinski, Chief Financial Officer Ian Borden and Chief Restaurant experience officer Joe McDonald. As a reminder, the forward looking statements in our earnings release and 8K 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 re enter the queue for any additional questions.
Today’s conference call is being webcast and is also being recorded for replay on our website. And now I’ll turn it over to.
Christopher John Kempczinski — Chief Executive Officer
Good afternoon everyone and thank you for joining us today. I want to start by recognizing the resilience and commitment of the McDonald’s system. Our franchisees, suppliers and employees showed up for our customers and supported communities to close the year with strong momentum and a solid foundation heading into 2026. In 2025, McDonald’s delivered system wide sales of nearly $140 billion, up 5.5% in constant currency for the full year. This reflects solid comp sales growth of more than 3% for the full year and over 5.5% in the fourth quarter with strong growth across all segments. Our system wide sales growth also reflects the benefit of our accelerating pace of new restaurant openings.
In 2025, we opened 2,275 restaurants on top of the more than 2,000 restaurants we opened in each of the prior two years. All while we’ve continued to see attractive returns from these new restaurants. Our pace of new store openings will accelerate further as as we target approximately 2,600 gross restaurant openings in 2026, which keeps us on track to achieve 50,000 restaurants by the end of 2027. Despite a challenging industry backdrop, our system stayed agile throughout 2025 by concentrating on what we can control. As we look to 2026, success will again depend on going three for three compelling value that brings customers in the door, breakthrough marketing that creates meaningful moments for our fans and menu innovation that provides great tasting food for our customers.
We believe this disciplined focus enables McDonald’s to outperform in any environment. Let’s start with value. We’ve listened to customers and adjusted along the way with a relentless focus on delivering leadership in value and affordability, and. Our efforts are working. In the US we launched McValue at the start of the year which drove immediate incrementality, and then we relaunched Extra Value meals in September. As we’ve said before, we’ll measure success of our EVM program in two ways, through our ability to gain share of low income traffic and by improving value and affordability experience scores. I’m pleased to say that our EVM performance in the fourth quarter is exactly where we had hoped to be at this point. Together with McValue and exciting marketing, we gained share with low income consumers in December and we’ve seen a meaningful increase in our value and affordability scores.
Predictably, as US franchisees provided these stronger value offerings throughout the year, their cash flow grew versus the prior year in our Big five international operated markets. We’ve offered everyday affordable price options or EDOP and menu bundles since early 2025. As awareness for these programs has grown, we’ve seen value and affordability scores steadily improve throughout the year, which also tell us they’re resonating with customers. As I’ve said before and I will say again, McDonald’s is not going to get beat on value and affordability. It’s in our DNA and we remain agile to respond as appropriate to a dynamic competitive landscape that takes us to marketing.
We once again activated in ways that reached far beyond our restaurants and into global culture. In 2025, the Minecraft movie collaboration was our largest global campaign ever, bringing together two iconic fandoms across more than 100 markets and 37,000 restaurants. And most recently the Grinch Returned. After first debuting In Canada in 2024, the campaign, which came to life in several markets in 2025, drove extraordinary excitement, sparking sellouts and becoming a true holiday moment for millions of families. With the inclusion of Grinch themed collectible socks in many markets, we were the largest seller of socks in the world for nearly a week.
We sold about 50 million pairs globally across the first few days of the campaign. Both record setting programs show how uniquely position McDonald’s is to tap into culture at massive scale, reinforcing the power of a one McDonald’s way of marketing and our ability to share creative excellence across the system, the last element of our trifecta is menu innovation. We saw strong performance from the return of snack wraps in the US, the debut of McWings in Australia, and the introduction of the Big Arch in several markets, each resonating with different customer segments and bringing excitement to our menu as we build what’s next, we’re grounding our work in a sharper focus on taste and quality, creating dishes that feel unmistakably McDonald’s and resonate with customers around the world.
There is so much exciting work happening in this space. In a few minutes, Jill McDonald, our chief restaurant Experience Officer, which includes leading the global category management teams, will share more of what’s coming this year. I was recently in Australia and saw firsthand how they’re going 3 for 3 with value marketing and Menu to Win. Our close partnership with franchisees is driving strong momentum in the market. It’s proof of what happens when you hit the mark on all three, driving strong business momentum and market share gains. With that, I’ll turn it over to. Ian to Talk through our 2025 results in more detail.
Ian Borden — Chief Financial Officer
Thanks Chris and good afternoon everyone. As Chris mentioned, I’m proud of what the McDonald’s system accomplished amid a challenging year for the industry. In the fourth quarter we delivered strong comp sales revenue and earnings growth while also driving improvements in overall customer satisfaction scores across our top 10 markets in aggregate. Specifically in the fourth quarter, global comparable sales were up 5.7% with positive comparable guest counts. In the US, comp sales for the quarter were up 6.8%, which was above our expectations and was driven by positive check and guest count growth. While some of the performance is attributable to easier prior year comparisons, it largely reflects the success of value menu and marketing initiatives that supported steady improvement in our baseline momentum.
Together, these drove the highest quarterly comparable guest count gap to near end competitors in recent history and set a solid foundation for 2026. Two marketing initiatives contributed to our strong performance. First, we kicked off the fourth quarter with Monopoly, which resulted in one of our largest digital customer acquisition events ever. Today we have about 46 million 90 day active users in our US loyalty app, and during the Monopoly event we saw nearly 500 million games played. Second, we closed out the quarter with the Grinch Meal, which set new sales records including the highest single sales day in our history.
Overall, for the entire campaign, we sold nearly as many Grinch meals as our highly successful 2025 Minecraft movie meal and 2024 collector cups promotions combined. The Grinch Meal captured fans attention a true testament to the power of the McDonald’s brand with the right marketing execution. In addition to these marketing events, as Chris mentioned, in early September we relaunched Extra Value Meals to address customer value perceptions of our core menu offerings. In the fourth quarter, we increasingly saw evidence that this was working as intended. In addition to the improving trends in low income share and value and affordability experience scores, the program drove improvements in units sold for our top EVMs, supported by the nationally price pointed $5 sausage, egg and cheese McGriddles meal and $8.
10 piece Chicken McNuggets meal in November. The momentum has continued in January behind the support of the nationally price pointed $5 sausage McMuffin with egg meal and $8. 2 snack wrap meal and we remain on track to achieve our targets for incremental traffic associated with the EVM relaunch. Turning to our international operated markets, comp sales were up 5.2% in the segment, marking a third consecutive quarter of comp growth above 4%. Despite the challenging industry backdrop, strong execution in the UK, Germany and Australia drove performance with each market delivering comp sales growth in the mid to high single digits.
Momentum behind McDonald’s UK’s turnaround continued in the fourth quarter with market share gains for the first time in over a year behind the execution of several exciting promotions. As in the US, the Grinch campaign also exceeded expectations and featured McShaker fries and special edition socks. The Menu Heist campaign, which is the UK’s version of our popular Taste of the World promotion in other markets, showcased the global strength of the brand by offering customers a curated selection of international menu favorites at their local McDonald’s restaurant. This promotion delivered sustained strong performance through its six week run and given the success we’ve seen in the UK and other markets, we plan to expand it to even more markets in 2026.
Germany and Australia also went 3 for 3 on executing value menu and marketing initiatives, resulting in share gains in each market. In the fourth quarter, both markets leveraged solid foundations and value offerings and capitalized on strong marketing campaigns. Germany’s strong performance reflected the annual return of the Big Rosti, a large format burger as well as a Friends TV show themed marketing campaign that was similar to a successful promotion in Spain just over a year ago and which we also plan to expand to more international markets in 2026. And in Australia, the breakfast Day part drove performance through menu innovations such as Matcha Lattes, the brekkie wrap and McGriddles, while the highly successful Grinch promotion highlighted innovative menu offerings such as the chicken, big Mac and McWings and a special hotcake syrup sauce.
Finally, in our international developmental license markets, comp sales for the quarter were up 4.5%, led by Japan, with all geographic regions reflecting comp sales growth. Japan’s performance has been consistently strong all year. It was supported in the fourth quarter by the launch of the My McDonald’s Rewards loyalty program, marking a significant milestone in our global digital strategy in China. Although the market continued to face macroeconomic pressures, we maintained share in the quarter. In addition, we opened more than 1,000 restaurants in 2025 and now have a presence in every province. Turning to the P and L, adjusted earnings per share was $3.12 for the quarter, which includes a 10 cent benefit from foreign currency translation.
Adjusted earnings per share on a Constant currency basis increased 7% versus the prior year quarter reflecting sales driven margin contribution. Our total adjusted operating margin for the full year was 46.9%. In line with our expectations and reflecting the strength of our business model and the resilience of our system, total restaurant margin dollars were more than 15 billion for the year. As we look back on the full year, our capital expenditure spend was 3.4 billion, slightly above the high end of the range that we provided for the year as we invested more toward our future year development pipeline, setting us up for success as we continue to increase our pace of openings in our wholly owned markets.
I’m proud of what McDonald’s has been able to deliver in a challenging environment and we believe that we are well positioned to deliver solid results in 2026. And with that, let me hand it over to Jill.
Jill McDonald — Global Chief Restaurant Experience Officer
Thanks Ian and good afternoon everyone. I’m pleased to be here today to share more about the work of our Restaurant Experience Team and preview what’s coming in 2026. It’s been nine months since we established the Global Restaurant Experience Team and when we announced this change, we noted that it would be significant for two reasons. First, our new integrated structure sets us up to execute with greater pace, which means ideas can start showing up in our restaurants even sooner. We can develop and scale product innovations faster than ever before with menu supply chain and operations all in one team.
And second, our new category structure with dedicated leaders for beef, beverages and chicken would give us better accountability and a sharper line of sight into what it takes to win in each of these large and growing verticals. We know that while value remains important for customers, delivering great taste and quality are their top needs, and that’s at the center of everything we’re doing across the Restaurant Experience with that context, let me share more on each of the three categories, starting with beef. We’ve continued rolling out Best Burger, which is now in more than 85 markets and on track to deliver on our commitment to be in nearly all markets by the end of 2026.
Best Burger is the key to hotter, juicier and even tastier burgers, which improve customer satisfaction scores and streamline operations for restaurant crew. We also began to pilot Big Arch about a year and a half ago and it’s shown strong traction across several markets. Customers are responding to this delicious, more satisfying burger that meets their demand for something heartier while still feeling distinctly McDonald’s. Its strong performance helped it most recently earn a permanent spot on the UK menu. We see potential to continue scaling this platform as we strengthen our position within this tier of the beef category.
Now let’s turn to beverages. We are excited about the global beverage opportunity of more than $100 billion. You can expect to see new offerings in the US as well as select international markets in 2026 designed to capture share of this large and fast growing category. We’re exploring energy indulgent iced coffees, fruity refreshers and crafted sodas. We’re thrilled to launch our new US beverage lineup later this year under the McCafe brand. It builds on a highly successful test that exceeded expectations in the fourth quarter across more than 500 U.S. restaurants. As we’ve said before, the new beverage offerings drove incremental occasions across different dayparts as well as higher average check, including strong results from our Red Bull collaboration, which we plan to continue building in both the US and beyond.
We’re applying learnings from the US test as we expand offerings across the system. Australia, for example, ran a small beverage test at the end of 2025 and adapted those insights by refining some of the recipes and tailoring some of the flavour profiles to meet local preferences. Lastly, chicken Just as a reminder, this global category is two times the size of beef and faster growing. We grew our chicken category share across our top 10 markets in 2025 and believe we’re well on our way to increasing our share by at least 1 percentage point by the end of 2026 versus where we were in December 2023.
At the foundational level, we achieved our target of deploying the McCrispy Sandwich Equity to nearly all major markets by the end of 2025. And on the innovation front, many of you have spotted something cooking at a few restaurants in the Chicagoland area. We’re in the early stages of testing new flavor combinations and new ways of cooking as we continue to explore great tasting recipes for customers to enjoy. While I’ve shared how speed and scale show up across the three menu categories, innovation at McDonald’s doesn’t stop there. The same disciplined approach is guiding the technology advancements coming to life in our restaurants, rounding out what it truly means to deliver the full McDonald’s restaurant experience.
The Restaurant Experience team is using these tests to learn quickly and apply those learnings to capabilities like voice ordering, shift management tools and other AI enabled tools and digital enhancements that help make running great restaurants easier and more enjoyable for both crew and customers. Taken together, these efforts reflect how we are continuously innovating and improving the full scope of the McDonald’s experience, bringing forward even more delicious food, smarter operations, thoughtful design and technology that meets customers and our restaurant teams where they are. It’s all part of how we’re modernizing the way McDonald’s shows up every day and now I’ll turn it back over To Ian
Ian Borden — Chief Financial Officer
Thanks Jill as we look ahead to 2026, we remain confident in our strategy and our ability to outperform our competitors in any operating environment by focusing on what we can control and by leveraging our global scale and financial strength. We believe the underlying assumptions for our 2026 outlook are prudent and reflect our expectations that the QSR industry environments in the US and across many markets will remain challenging should the environment improve beyond our expectations. We believe McDonald’s is well positioned to benefit disproportionately relative to our competitors. We expect that net restaurant expansion in 2026, along with restaurants we opened in 2025, will contribute approximately 2.5% to systemwide sales growth.
We expect our operating margin to be in the mid to high 40% range and to expand from our 46.9% adjusted operating margin in 2025. We’re targeting G and A as a percentage of system wide sales for the full year to be about 2.2%, reflecting our ongoing investments in our strategic growth drivers like technology and Digital and Global Business Services or gbs. These investments are designed to unlock efficiencies in running the business and to support long term growth for our people and stakeholders. Below the operating line, we expect interest expense to increase between 4% to 6% from the prior year primarily due to higher average interest rates and expect our full year effective tax rate to be between 21% and 23% with some volatility quarter to quarter that may cause the quarterly rate to be outside the annual range.
We expect foreign currency to be a full year tailwind to 2026 EPS totaling in the range of $0.20 to $0.30 based on current exchange rates. As always, this is directional guidance only as rates will likely change as we move through the remainder of the year. Turning to capital allocation, we’re committed to maintaining financial discipline and creating value for our shareholders over the longer term. Our priorities remain unchanged. First, we look to invest in the business to drive growth, including capital expenditures to primarily support new restaurant openings as well as investments in technology, digital and gbs.
Second, we prioritize our dividend, which has increased in each of the last 49 years. And third, we repurchase shares with remaining free cash flow over time with respect to restaurant development and capital expenditures. As Chris mentioned, we continue to accelerate our pace of new unit openings and remain on track to achieve our target of 50,000 restaurants by the end of 2027. In 2025, we exceeded our openings plan for the year with gross openings of about 2,275 restaurants and net openings of 1,880. And in 2026, we’re targeting approximately 2,600 gross restaurant openings, with about 750 of these in our US and IOM segments.
We expect to open more than 1,800 restaurants in our IDL segment, including about 1,000 in China. Overall, we anticipate about 4.5% unit growth from the approximately 2,100 net restaurant additions in 2026. We expect our capital expenditure spend to be between 3.7 and 3.9 billion this year, with the majority invested in new unit openings across our US and IOM segments. This increase in CAPEX versus the prior year of 3.4 billion is in line with the targeted increase of about 300 to 500 million that we outlined at our December 23rd investor day. Lastly, we’re targeting our net income to free cash flow conversion rate in 2026 to be in the low to mid 80% range, which is in line with the 84% in 2025.
And with that, let me hand it back over to Chris.
Christopher John Kempczinski — Chief Executive Officer
Thanks, Ian. As we close the books in 2025, it’s only natural to reflect not just on the year that was, but on how far we’ve come since announcing accelerating the arches in November 2020 and expanding our ambitions in December 2023. We made bold commitments to grow our business. We’ve made great progress on our accelerator priorities, and we’ve become a fundamentally different company. You heard from Jill how that transformation is coming to life across the restaurant experience from Food operations, design and technology. When we started this journey from a company standpoint, we didn’t have a global business services function.
Today we do. We didn’t have revenue growth management function. Now we do. We didn’t have a standardized global tech stack. Today we’re close. The early benefits from these new capabilities gives us a clear line of sight into how they’ll unlock growth and productivity moving forward. Loyalty is another great example. In November 2020, the McDonald’s loyalty app was just beginning to launch in the U.S. in 2023 we had about $20 billion in system wide sales to loyalty members across 50 markets. In 2025 we almost doubled those sales with nearly 210 million 90 day active users across 70 markets.
And we’re on track to reach our target of 250 million 90 day active users by the end of 2027. This matters because we know that loyalty increases visit frequency and opens the door to new ways to engage with our fans, like multi visit bonus games such as the Snack Craps Campaign in the US or exclusive partnerships available only through the app. Another critical proof is the connection between the app and the deployment of Ready on Arrival in our top six markets. It’s already driving faster service, reducing wait times and improving customer satisfaction, and we expect those benefits to compound as adoption grows across the system.
These touch points simply didn’t exist a few years ago. When we execute, we know we can outperform the competition in any environment. What’s clear is that we’ve earned the right to look forward. We’re excited to share what’s next with our system at our Worldwide Convention in Las Vegas in June, and we expect to share more details with all of you during an Investor Update sometime this fall. Stay tuned. Before we turn to your questions, I want to again thank our franchisees, suppliers, restaurant teams and everyone across the McDonald’s system for the commitment, the partnership and the passion that you bring to this business.
Your dedication is the driving force behind our achievements and what enables us to pursue this next chapter with confidence as we transform our long term ambitions into tangible results. And with the New Year well underway, we’ll continue to lead, innovate and deliver for our customers, our people and our shareholders. Together, we will make 2026 a year that defines the future of McDonald’s. With that, we’ll take your questions.
Questions and Answers:
operator
Thank you. And as a reminder, if you are an investor and would like to ask a question, please 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.
Unidentified Speaker
Our first question today is from Dennis Geiger, ubs. .
Dennis Geiger
Thanks Good afternoon, guys. Appreciate the insights. And Jill, very helpful to get an update from you as well. Chris and Ian, following a strong end to 2025, you both talked about a solid foundation into 2026. Could you talk a bit more on how you’re thinking about the US sales. Trajectory in 2026, given some of those. Sales drivers you identified and perhaps how you think about going three for three across value, marketing and innovation to drive US Sales growth this year? Thank you.
Christopher John Kempczinski
Sure, I’ll start. And Ian, if you have any additional thoughts. But you know, let’s start with value. And as I mentioned in the call, the US put in place the McValue program that has performed well for us. We added to that the EVM toward the back half of the year. And as we go into 2026, you know, McValue for us is going to continue to be the foundation for our value program. It’s going to be something that always continues to evolve. Joe has talked about that in the past and you know, there’s real conversations, live conversations going on right now in the system.
But I feel really good about where McValue is head in this year. And then I think also, you know, we’ve seen the power of great marketing. We’ve seen, you know, how something like a Minecraft or Monopoly or Grinch when you have strong value with that can really be an accelerant for the business. And I’m feeling good about the lineup that the US Team has there. And then of course, we’ve talked about beverages. Jill also mentioned some of the other things that we’re doing with burgers and chicken. And so I think we’ve got a strong slate of menu news lined up for the year as well.
So now it comes down to what I talked about also in the comments, which is it looks great on paper. We’ve just got to go execute. But I think Joe and the team are working well with the franchisees. I know there’s a lot of energy and excitement around this. And so I’m confident we’re going to go out and execute with excellence.
Ian Borden
And maybe Dennis, just a couple of small builds to what Chris teed up. I mean, I think value and affordability, as we’ve talked about pretty consistently are the greens fees. I mean, you’ve got to have it. It’s core to our DNA as a business and brand and it’s certainly core to what consumers are expecting. And I think we would say we’ve done a pretty good job of kind of strengthening our value and affordability with the things that Chris talked about us putting in place. And that is certainly what we believe is one of kind of the underpinnings to the momentum that we’re seeing in our US business.
We talked about the fact that in Q4 the US had positive guest count growth, which is always a really strong indication that you’re kind of getting to that sustainable top line growth that is going to drive both sales and more volume into the restaurants. And I think just maybe something to note that I think is another important proof point is our US business had its strongest comp guest count gap to the near end competitive set in Q4 in recent history. So I think those are all signs of encouragement to us. The key though is you’ve got to get the three for three.
It’s not just about value and affordability or about menu or about marketing individually. It’s how you bring those together and leverage them to kind of get that holistic output that you saw us, I believe, deliver in Q4.
Unidentified Speaker
Our next question is from Sarah, Senator, bank of America.
Sara Senatore
Oh, thank you. I guess maybe I wanted to sort of dig in a little further on that value. I know you kind of approached it two ways. One was sort of streamlining or systematizing the approach to the meals, you know, kind of that 15% discount to a la carte prices. Then you also pull some very sharp price points, as you said, the 5 and 8. So as you think about the pricing architecture, I guess which of those do you think was more powerful? Because I’m asking in the context of restaurant level margins that were sort of flattish year over year.
And so, you know, assuming maybe there’s some kind of pressure from that on franchisee margins and maybe just tacking on to that, are any of the technology solutions that Jill mentioned, are those some of the ways to kind of maybe support this sharper value? Thank you.
Christopher John Kempczinski
Sure. Well, I guess I’d say, you know, I don’t think it’s one or the other. I think what we’ve seen and certainly what we’re trying to execute is the customer absolutely wants predictable value. And having an EVM is I think the way historically we have always delivered for that customer that predictable everyday value. So you need to have that and certainly pleased with where the system in the US was able to get to on that. As you well know, it’s something that has been well established on our international business for years. And so we’re in a good shape there as well.
But then also the customer is looking for in this environment some price pointed items that are offering particular value on top of that. And so I think you’ve got to be able to have the predictable value, but the customer also needs to be excited around price pointed items that come in and out of the menu. And that’s what we executed against.
Ian Borden
Maybe Sara, just to kind of hook on to Chris, because I know you highlighted kind of margin pressure. I just, I think if you kind of go back to what we’ve talked pretty consistently about, what it takes to grow margins obviously is strong top line sales growth. We saw that in Q4. We grew margins in Q4, including in the US on the back of that. Obviously if you look back to earlier quarters, we had less top line growth in the US combined with obviously higher levels of inflation. I think that put more pressure on that.
I think the other data point a little bit to what Chris highlighted, which is you got to do both. I mean, at the end of the day, our owner operator average cash flow in the US was up year over year. And I think as we’ve talked about historically, the way you get to sustainable profitability and profitability growth as you drive more volume, more customers into restaurants and I think if we get that three for three formula right, as we’ve done in Q4, I think you’ve seen that we’re clearly capable to do that and do that well.
Unidentified Speaker
Next question is from Brian Harbert, Morgan Stanley.
Brian Harbour
Yeah, thanks. Good afternoon guys. I wanted to ask about just the capital budget. I think it’s generally run kind of at the higher end of, I think where you thought it would a couple of years ago. It’ll probably end up being up by a billion and a half dollars versus 23. Is that exclusively because you want to move faster on constructing new stores or is there some other piece of that we don’t see? And I think it’s interesting just even in markets with not much population growth, you’re pushing pretty hard on unit growth.
Is that a function of you think because the industry is under stress, this is the time when you should really be taking market share and trying to secure new sites because you think the share opportunities are greater today. Is that the main driver?
Ian Borden
Yeah. Hi Brian, it’s Ian. Let me take that one. Well, I’d start just kind of going back to what we outlined in our December 23rd Investor Day event. And we said there we expected our capital budget to go up basically 3 to 500 million every year consistently as we got to our run rate of 1,000 gross openings in our wholly owned markets in 2027. And we’ve basically been fully on track to that every year. We were slightly above that range in 2025 at 3.4 billion of capital for the year. But that was driven by two things, some kind of FX headwinds from a weaker US dollar and us being a little bit ahead of our future opening pipeline.
So more spend related to 26 and 27 opening. So it was a healthy, let’s call it adjustment, as you would have seen in our guidance. Again in 26 we expect the capital to go up another 3 to 500 million. So again consistently in that range, you know, we did, as we talked about before, a lot of work before. We kind of committed to where we thought we wanted to be at 50,000 units by end of 27, in 23 to really get deep on where we felt the gaps in trading areas, where we felt the opportunities were.
And as you know, we’ve used the US as an example before, which is one of our more mature, fairly penetrated markets, but a market where we hadn’t grown net units since 2014, I think until basically 22, 23, a market where there’s been a lot of population migration over time, where our openings have not kept up. And so I think the ultimate measure is are we getting the first year sales in those new sites? Are we getting the returns that we expect? And the answer to both of those questions is yes. And that is confirmatory to the fact that we’re getting the right sites in the right places and building the brand in a very healthy way.
Unidentified Speaker
Next question is from Dave Palmer at Evercore.
David Palmer
Yeah, thanks. Good afternoon. I’m just trying to think about how I want to ask this question about what feels like picking up in momentum, but also a picking up in your pipeline of ideas that you have going at the same time. Beverages is one example where you tested something, you’re coming out and you’re confident. That you have it and it will work. It sounds like you’re testing stuff with chicken. It sounds like maybe earlier days there, I’m not sure there even on value feels like that’s something where you’re continuing to refine as you’re getting momentum. So you know, like a lot of. Companies coming out of COVID there was.
A little bit of just a disruption. During that period and adjustment and now you’re kind of getting your footing in terms of the pipeline. So maybe, I don’t know, that’s an open ended question if maybe you want to Comment on that. And then maybe even stuff that are more foundational beyond just even the tech stack. If you’re thinking about things in terms of kitchen and other, that might be things that we can think about for the future. And. Thank you.
Christopher John Kempczinski
Yeah, thanks for the question. You know, I would say if you think about the company today and frankly the world that we’re operating in, it’s just we’re at a very different starting point. And I went through a number of the things that we’ve done from a company standpoint with accelerating the arches that I think put us in a very different place today. When you have what will be 250 million consumers, 90 day actives on your loyalty platform, that opens up a whole different way of engagement with your customers than what we had when we began that journey back in 2020.
When you have the ability to get every market onto a common tech stack, our ability to move with speed and to deploy solutions gets increased by factors of significant numbers. And so we’ve been trying to spend some time to just think about with these new capabilities, how do we actually start to bring those to market in a way that makes a meaningful difference on both the top line, but also on the productivity side. And I think at the same point, if you go back to where we were in 2020 or even 2023, nobody was talking really about AI.
Certainly we weren’t talking a whole lot about AI. There was not some of the commentary and thoughts around what does GLP1 do in the industry? What are the impacts of that? We’re certainly leaning into all of those things and thinking about all those things and making sure that we’re ahead of the curve, that we’re seeing around corners and keeping this brand position at front. So what Jill is laying out, you know, we’re testing a ton of ideas and I would say also in the restaurants that we’ve got, they’re different in each restaurant. It’s not the same thing in each restaurant.
And, you know, we’re excited about sharing more of what we’re learning with our system, which we’ll do in Las Vegas. And then you’ll hear more from us, as I mentioned, in the fall, where we bring to light what we think is what’s next for McDonald’s.
Jill McDonald
Just perhaps to build on that, we’ve introduced, as I said up front, the new category management structure, which we’re pleased with the progress that we’ve made in the first nine months and that really is helping to focus the organisation. We’re bringing together operations, supply chain, menu marketing around the table together to work in concert to move at greater pace. And we can certainly see consumers are reacting well to new news, as evidenced by the beverage test that we ran earlier in 2025 in the US so we’re seeing early benefits from moving with pace. And I think but one part, but an important part, has been the introduction of category management.
Unidentified Speaker
Next question is from John Ivanka of J.P. morgan.
John Ivankoe
Hi. Thank you. So it’s certainly an admirable goal to have taste and quality as metrics that you want to improve or at kind of pursue for the McDonald’s brand. But my question was really what kind of changes that might have to happen within the kitchen itself to maybe achieve some of these goals, both in the near term and the medium and longer term? In other words, is there equipment, technology, layout that may have to really be changed in a fairly significant way to maybe achieve some of the taste and quality? And, you know, I do ask this question in my travel, you know, seeing some stores in France, for example, that had very different equipment and a very different layout than the McDonald’s that I’m used to seeing.
And, you know, what I’m really asking is, is there something like. And I don’t know what to call it, an experience of the future, version two, that might be part of the plan in the next couple of years.
Christopher John Kempczinski
Thanks for the question, John. One of the benefits of being 115 different countries is we’ve got innovation going all over the system. And I’d say when we think about moving the needle on tasting quality, we’re going in without any kind of preconceived notions. We’re not going in with any constraints. We’re just, you know, the challenge to the team is how do we continue to, you know, make further improvements around taste and quality, recognizing that the competitive set is raising the bar on that. And so that’s some of what Jill and the team are testing as to how that impacts the restaurants.
We don’t have the answer right now, but I think, as you all are aware, we’re heading into a remodel cycle. EOTF is as hard as it is to believe. The EOTF process in the US Is now almost a decade ago that we began on that. It was even longer in some of our IOM markets. And so we’re in a natural cadence where our system historically does do remodels around every 10 years or so. And so let’s just make sure as we go into this remodel cycle that we’re doing it Mindful of how do we continue to come up with ideas that are going to drive the business? And we think tasting quality is certainly one of the biggest opportunities for us.
Jill, pass it over to you?
Jill McDonald
Sure. So Chris has outlined some of the sort of the early thinking on where can we innovate going forward to make sure that our restaurants are set up to grow, where we’ve identified growth opportunities. Chicken, there’s plenty of growth still in beef, as well as the new areas of beverage. But we’re also thinking about improving taste and quality around how we renovate today as well. So, you know, how do we help the restaurants execute to the gold standards that we have today as well? So we’re kind of really thinking about this in a couple of different time frames, what we can do today and how do we get ready for the future.
Unidentified Speaker
Next question is from David Tarantino at Baird.
David Tarantino
Hi, good afternoon. I had a couple questions back on the US Value strategy. Chris and I was wondering if you could comment on how franchisees in the US Are embracing the strategy, and really two parts to that. One, some of the strategies you’ve had have required McDonald’s to support that financially. What’s the current sentiment in the system on extending that without McDonald’s support? And then the second question, perhaps more importantly, is I think you’ve rolled out some new brand standards, and I was hoping you could comment on what that might mean for the pricing strategy on the core menu going forward.
It seems like keeping price points low and price increases perhaps at or below inflation is important. So just wondering if you can provide some insights on how the system’s thinking about that equation.
Christopher John Kempczinski
Sure. Well, I’d say certainly in my travels, and I was just with some operators in Dallas earlier this week, that there’s good enthusiasm for where the business is at. Certainly finishing the year as they did in the US Is great kind of heading into the new year. And so when cash flows up, when there’s business momentum, I think all of those things work toward having positive sentiment, particularly in an environment right now where our performance relative to what we see from some others, I think our franchisees are understanding or appreciative of. It’s not easy out there, and we’re certainly pleased with our performance, you know, as to how that continues to evolve.
You’re right. Our support for EVMs rolls off in many cases. It’s already rolled off in some places. But I think our system generally looks at business results, and I think the numbers are pretty clear that the EVM strategy for us is working And I would expect that anybody who’s looking at the data, it’s a pretty easy conclusion as to what you would do with that. But ultimately, our support, as we’ve talked about a number of times, it’s timely, targeted and temporary. We don’t subsidize pricing on a permanent basis. And so I think with how we’ve worked together as a system over the last quarter, now heading into two quarters, I think the pathway forward is pretty clear.
But ultimately that’s going to be up to franchisees on that. And then to your question around brand standards, I mean, just to reiterate or state the obvious, franchisees set pricing, but at the end of the day, we are the custodians of the McDonald’s brand. That is what we’re selling. And one of the things that’s core to our brand is our value positioning. And so we don’t prescribe exactly how the franchisees have to go deliver value, but the franchisees need to protect the brand. And part of that brand DNA is our value leadership that we have there.
And so there’s lots of different ways we provide support to franchisees through rgm, this revenue growth management on different ways to go do it. And the expectation is that however franchisees decide to align against it, they’re going to continue to live up to what Ray Kroc started with this brand, which was one of the world’s great brands that also continue to lead on value.
Unidentified Speaker
Next question is from Greg Frankfurt over at Guggenheim.
Gregory Francfort
Hey, thanks for the question. I guess I had two questions. One, you made a comment about customers. Increasing their frequency on the loyalty program. Do you have a sense for how. Much of a needle mover that is? And then just the second part of. That is, I think you also made. A comment about the accelerating the global tech stack and being almost where you want to be. What are the remaining hurdles to getting that done? Thank you.
Christopher John Kempczinski
I’ll let Ian take both of those and if he flubs it, I’ll jump in.
Ian Borden
Vote of confidence.
Christopher John Kempczinski
Yeah, vote of confidence.
Ian Borden
Teamwork, Greg. Let me try and take those. So I think on the loyalty program, I go back again to just emphasize that when we laid out In Investor Day, December 23rd, loyalty membership, you’ll remember we laid out a metric of getting to 250 million 90 day active users by end of 27. We said in our upfront remarks, we’re now at 210 million 90 day active users, well on our way and confident to get to that 27 goal. And we have said that loyalty Active loyalty membership is our single most important digital metric because when we get consumers into our loyalty program, they visit more often and they spend more overtime and they interact with us more frequently, so they get more value in their interaction with us and we get more value by them interacting with us.
And I think we have a lineup of a pipeline of ideas on how we’re going to continue to build and add capability that will add further value to our loyalty customers as we look, look forward to. Kind of get to your question more specifically. And we gave this data point, I think, a quarter or two ago. If you look at our US business as an example, a customer in the 12 months, an average customer in the 12 months before they joined our loyalty program visited us 10 and a half times. In the 12 months after they became a loyalty member, they visited us 26 times.
So we increased their frequency of visit by more than two and a half times. And they also spend more with us over time. That’s why loyalty is important and that’s why we’re excited to kind of continue creating value so that consumers will be compelled to join and compelled to continue to interact with us on a more frequent basis. I think on the tech stack, I think, you know, we’ve been pretty open over time. I mean, to go from a fragmented, decentralized kind of tech organization to common platforms. And you’ll remember again in our Investor Day in 23, we laid out, we want to get to three common platforms in our business that are tech enabled through a common tech backbone, so to speak.
That’s our consumer platform, our restaurant platform, and our company platform. We’re making progress against each of those three. We’ve got a little more work to do, as Chris alluded to, but we feel really confident in where we’re at and the pace of what’s left to go to kind of get us to that overall outcome.
Unidentified Speaker
Next question is from Andy Barish over at Jefferies.
Andy Barish
Yeah, good evening, guys. Wonder if we go back to the beverage efforts in the US and kind of interesting that you did not mention cosmics. That seems to be a shift. And any, you know, any color you’re willing to provide just in terms of the rollout as we look towards the rest of this year.
Jill McDonald
Sure, I’ll take that question. So we are, obviously, we’re really excited about the beverage launch in the US later this year, and we are going to do it under the McAfee brand. So we obviously learned a lot through the cosmic test, and those learnings have been applied to how we’ve decided to set up this new beverage range. But we are going to be launching under the McAfee brand. And just to give you a little bit more colour, the results did exceed expectations for the entirety of your program. It did drive incremental occasions. These were mostly snack, dinner and evening and we also saw higher average checks.
So the financials are really playing out well. We learned a lot about the recipes. We offered a range of recipes across indulgent coffees, refreshers, energy and sodas. Crafted sodas all did well, particularly the crafted sodas, refreshers and energy. And we’re going to do what we do best at McDonald’s. We’re going to offer great tasting products, great prices with the speed and convenience that our customers want and expect. So more to come on that we’re not going to reveal too many more specifics or the timing, but you can expect to see news in the U.S. and outside of the U.S.
Unidentified Speaker
Next question from Lauren Silverman at Deutsche Bank.
Lauren Silverman
Thank you very much. Great quarter. Strong acceleration across segments on a two year basis as we look to 26. We still have a lot of dynamics in the consumer environment. Sounds like you have a really strong playbook. Can you give any color on how we should be thinking about? I guess Q1 knowing there’s some weather there, still have a little bit of the E. Coli lapse and then thoughts on the same store sales progression as we move through 26. Thank you.
Ian Borden
Hey Lauren, it’s Ian. Let me take a crack at that and I’m sure Chris will add on here. Look, I think as we’ve talked about already, we feel really good about the underlying momentum and kind of the consistency of that across each of the three operating segments. I think we expect that momentum to kind of continue in 26 and obviously what we’re focused on and we’ve talked about a lot is really going 3 for 3, focusing on the things that are within our control. I think we expect probably that the first half will be likely a little stronger than the second half and that’s just largely a reflection of kind of the benefit of the favorable year over year comparisons that we’re up against.
Maybe just to give a little color by segment. I think for the US We’ve had a solid start in January. We had good kind of underlying momentum as you’ve heard us talk about today, supported by I think what we’ve done with extra value meals. Obviously McValue. More broadly, I think we would say we expect Q1 comp sales growth to decelerate sequentially from the 6.8% in Q4 that you saw, I think there are two key reasons for that. One is Q4 growth was particularly strong, obviously driven by two really strong activations in Monopoly and Grinch. And then, as is well known, you’ve heard from many others, obviously we had severe weather impacts in the US Kind of beginning in late January that pressured the industry traffic, pressured our traffic, obviously, and caused quite a few restaurants to close or reduce hours for a number of days.
We estimate that weather impact to be about 100 basis points for the full quarter. Just when you look at kind of the drag that we saw in January, I think on international kind of a similar story, I mean, we had a solid start in IOM in January. Again, we believe we’ve got kind of strong and consistent underlying momentum, but we do expect Q1 to decelerate sequentially from the 5.2% that we had in IOM. In Q4, again, we’ve got some weather, I would say, impacts in a number of markets in Europe through January that have put a little bit of pressure kind of on the underlying momentum.
And then IDL, again, expect a sequential decrease from the 4.5% that we had in Q4. Again, we feel pretty good about the underlying momentum that’s really just driven by, I would say, the kind of continued macro pressures in markets like China and parts of Latin America. So I think, you know, we’re really confident about what’s within our control, really confident about the underlying momentum of the business, and certainly feel good about our ability to continue to kind of execute well even though the environment remains challenging.
Unidentified Speaker
Next question is from John Tower of Red City.
Jon Tower
Great. Thanks for taking the question. Maybe, Jill, one for you. I was hoping you went through a. Lot of the menu ideas coming in. 2026 across the globe and in the U.S. specifically in the U.S. though, I. Was hoping you could drill a little. Bit more into how you’re thinking around the GLP1 adoption likely picking up this. Year with orals being available, and how. You’Re thinking through the menu. Operators across your system. Actually asking you how McDonald’s is going to potentially address this shift in consumption.
Christopher John Kempczinski
Sure. Well, let me start and then I’ll let Jill fill in. But as I mentioned in my comments earlier, we’re certainly spending a lot of time and paying close attention to it. I can tell you right now we’ve looked pretty hard and we don’t yet see evidence of it really having a material impact on our business. Now. That said, as you noted, pill forms just become available. We know, the pill form has had pretty strong adoption in the early weeks. Lilly will come out with a pill form of their own sometime in probably Q1, Q2. And so certainly our view is that adoption is going to continue to grow.
And as adoption grows, we know that consumers behavior changes. We know that in general they eat fewer calories in the day, but also what they eat, the mix of that changes. Fortunately for us, protein is one of the areas that this consumer, the GLP1 consumer, is still very much interested in. And we’ve got, you know, a great protein offering on our menu. So I think that’s an area of strength for us. But we’re also seeing changes around, you know, maybe less snacking, changes in some of the beverages that they drink, less sugary drinks. And so all of those things are factoring into some of what we’re out there experimenting with and testing with.
And ultimately, as we learn more about that and get feedback from our customers, you know, those things could make their way onto the menu. But Jill, I’ll let you kind of pick it up from there.
Jill McDonald
Sure. You know, we do have a history of staying close to customers and innovating and adapting our menu as required. So, you know, we are already pretty protein forward fillet, fish, chicken strips, snack wrap, sausage biscuit. We have a number of items on the menu that customers who are on GLP1 are enjoying. I think we can call out and just help customers a little bit more understand what is high protein on our menu because there are a number of options. But we’re also going to continue to, you know, learn, see what’s going to interest them.
We have a couple of ideas that we are already looking at for the longer term. So we will be led by the customers and what they want from us, but there’s plenty for them to enjoy on our menu currently.
Unidentified Speaker
Our last question today is from Jeff Bernstein over at Barclays.
Jeff Bernstein
Great, thank you very much. Just trying to get a sense for the barbell strategy. We talked a lot about value, so it’s hoping at least in the US you could share some color on the scores you’re seeing, maybe the share of value or mix of sales. Just trying to get a sense for where value sits and your comfort level there. And on the flip side, obviously a lot less talk these days about the premium offer positioning, but how do we think about the balance there? Obviously franchisees would love to push, as would you, I’m sure, the upper end of that barbell.
So what do we have on Tact or how do you feel about Your ability to push more premium product offerings as we move through 26 to balance with that value. Thank you. Sure.
Christopher John Kempczinski
Well, we’ve talked about on prior calls the fact that industry wide, you know, we’ve seen traffic hold up pretty well with upper income consumers and traffic has been pressured with lower income consumers. And of course lower income consumers are more value and affordability sensitive. We were pleased to see that we gained share with that low income consumer in December, which was very much one of the criteria that we set around our value program. And so obviously we’ve got to continue that. But I think we’re in a better position certainly with that part of the consumer cohort.
And then on the premium side, we’re going to have menu innovation that I think is going to continue to appeal to the upper income consumers. I think some of the beverage items could clearly go in that category. I think some of what we might be able to do in chicken and burgers as well could fit under that. So, you know, we’re a business where 90% of the customers are coming into our restaurant in the US at least once a year. And we need to make sure that we’ve got a broad offering that appeals to all of them and recognizes that they have different needs.
So I think we’ve got a good strategy on that. But certainly the expectation for the balance of 26 is that that low income consumer is going to continue to be under pressure and there should be, you know, call it mid single digit growth available with the upper income consumer. And so how do we make sure we’re winning with both of them? Thanks everybody for joining the call. If you want any types of follow ups, please send me an email. We can get something scheduled. Other than that, have a good evening and we’ll talk to you later.
operator
This concludes McDonald’s corporation investor call. You may now disconnect and have a great day.