Why Is McDonald's (MCD) Down 2.5% Since Last Earnings Report?

It has been about a month since the last earnings report for McDonald's (MCD). Shares have lost about 2.5% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is McDonald's due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

McDonald's Q4 Earnings & Revenues Beat Estimates, Rise Y/Y

McDonald's reported fourth-quarter 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.

McDonald’s results reflected solid systemwide momentum, supported by comparable-sales growth, accelerated restaurant expansion and strong engagement across markets.

Management emphasized that value leadership, impactful marketing and menu innovation remained central to performance, with initiatives like McValue, global campaigns and new product launches driving customer engagement.

MCD’s Q4 Earnings & Revenue Discussion

In fourth-quarter 2025, McDonald's reported adjusted earnings per share (EPS) of $3.12, beating the Zacks Consensus Estimate of $3.05. It reported an adjusted EPS of $2.83 in the prior-year quarter.

Quarterly net revenues of $7 billion beat the consensus mark of $6.85 billion. Additionally, the top line rose 10% year over year.

At company-operated restaurants, sales were $2.54 billion, up 10% year over year. Sales at franchise-operated restaurants amounted to $4.31 billion, which increased 9% year over year.

Moreover, Other revenues rose 35% year over year to $162 million. Our model predicted sales by company-operated restaurants to rise 10.5%, while franchise-operated restaurants were expected to increase 3.4% from the prior-year levels.

McDonald's Comps Details

In the quarter under discussion, global comps rose 5.7% compared with the 0.4% rise reported in the prior-year quarter. Our estimate was a 3.7% increase year over year.

Comps Across MCD’s Segments

The United States: In the fourth quarter, segmental comps rose 6.8% against a 1.4% decline registered in the prior-year quarter. The company's comparable sales for the quarter were aided by positive check growth. Our model estimated the U.S. comps to increase 2.9%.

International Operated Markets: Segmental comps jumped 5.2% compared with the 0.1% increase reported in the year-ago quarter. The rise was driven by positive comparable sales across the U.K., Germany and Australia. We anticipated an increase of 4.7% from the year-ago levels.

International Developmental Licensed Segment: Segmental comparable sales registered a 4.5% increase compared with a 4.1% increase reported in the prior-year quarter. Japan led the growth in positive comparable sales, with all geographic regions also reporting increases.

Operating Highlights & Expenses of McDonald's

In the fourth quarter, McDonald’s total operating costs and expenses were $3.85 billion, up 9% year over year.

Operating income rose 10% year over year to $3.15 billion. Net income totaled $2.16 billion, up 7% year over year.

MCD’s 2025 Highlights

Total revenues in 2025 amounted to $26.9 billion compared with $25.9 billion in 2024.

Net income in 2025 came in at $8.6 billion compared with $8.2 billion reported in 2024.

In 2025, diluted EPS came in at $12.20 compared with $11.72 reported in the previous year.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -5.02% due to these changes.

VGM Scores

Currently, McDonald's has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Following the exact same course, the stock has a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, McDonald's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

McDonald's belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, Starbucks (SBUX), has gained 3.5% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

Starbucks reported revenues of $9.92 billion in the last reported quarter, representing a year-over-year change of +5.5%. EPS of $0.56 for the same period compares with $0.69 a year ago.

For the current quarter, Starbucks is expected to post earnings of $0.42 per share, indicating a change of +2.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.1% over the last 30 days.

Starbucks has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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This article originally published on Zacks Investment Research (zacks.com).

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