McDonald's Stock Before Q2 Earnings: Buy Now or Wait for Results?

McDonald's Corporation MCD is slated to release second-quarter 2025 results on Aug. 6, before the opening bell.

In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 1.1%. MCD surpassed earnings estimates in two of the trailing four quarters, missed once and met once. The average miss over this period is 0.2%, as shown in the chart below.

Trend in Estimate Revision

The Zacks Consensus Estimate for second-quarter earnings per share (EPS) has increased to $3.15 from $3.14 in the past 30 days. The estimated figure indicates a 6.1% increase from the year-ago EPS of $2.97. The consensus mark for revenues is pegged at $6.71 billion, indicating 3.5% year-over-year growth.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for McDonald's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: McDonald's has an Earnings ESP of +0.43%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3 at present.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Influencing Q2 Performance

McDonald’s top-line performance in second-quarter 2025 is likely to have been driven by continued momentum in global comparable sales growth, supported by consistent customer traffic, menu innovation and digital engagement. The company’s strategic focus on core menu items such as burgers, chicken and coffee is likely to have resonated well with consumers, particularly in a value-conscious environment.

Tailored marketing efforts, like the successful "As Featured In" meal campaigns and partnerships with global celebrities, likely attracted both loyal and new customers. International markets, especially those in Europe, probably contributed meaningfully to top-line gains as consumer confidence improved and McDonald’s value-focused positioning held strong against inflationary pressures.

Digital and delivery channels likely played a critical role in driving incremental sales. McDonald’s has continued to leverage its digital ecosystem, including its loyalty program, mobile app and delivery services, to strengthen customer frequency and order value. With more customers shifting to online and mobile ordering, the brand is likely to have witnessed increased average check sizes and better conversion rates. Altogether, these factors are likely to have helped offset macroeconomic headwinds and kept revenue growth on a solid footing.

On the bottom-line front, McDonald’s is likely to have been driven by operational efficiency initiatives and margin improvement strategies. The company’s ongoing focus on simplifying restaurant operations, optimizing supply-chain processes and modernizing store formats likely contributed to better cost control and productivity. Its asset-light franchised model continued to provide a buffer against rising input and labor costs, helping stabilize restaurant margins. Additionally, pricing actions taken earlier in the year were likely effective in protecting profitability without significantly impacting traffic.

However, continued macroeconomic uncertainties in some key international markets are likely to have affected consumer discretionary spending. Inflationary pressures, particularly in labor and commodities, are anticipated to have weighed on margins despite pricing efforts.

Price Performance & Valuation

In the past year, the company has gained 12.8% compared with the Restaurant industry’s growth of 8.7%. The stock has also underperformed the S&P 500’s rally of 20.8%. Other industry players like Darden Restaurants, Inc. DRI, Starbucks Corporation SBUX and Yum China Holdings, Inc. YUMC have gained 44.4%, 17.6% and 56.7%, respectively.

Price Performance

Let us assess the value MCD offers to investors at its current levels.

From the valuation point of view, the stock is trading at a discount. MCD’s forward 12-month price-to-earnings ratio stands at 23.56, lower than the industry’s ratio of 24.72.

P/E (F12M)

Investment Thoughts

Given McDonald’s steady performance and resilient business model, existing investors may choose to hold on to the stock, but fresh buying should be approached with caution for now.

While the company continues to benefit from strong digital growth, menu innovation and operational efficiencies, near-term upside may be limited amid macroeconomic headwinds and its recent underperformance relative to broader market indices. Waiting for clearer signals from the upcoming earnings report or a more attractive entry point may offer a better risk-reward balance for new investors.

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

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