Is McDonald's Expansion Pipeline Enough to Offset Consumer Pressure?

McDonald’s Corporation MCD continues to advance its expansion pipeline even as consumer pressure weighs on traffic trends, particularly among lower-income cohorts. Management has been clear that macro headwinds — including elevated cost-of-living pressures and constrained discretionary spending — are likely to persist into 2026. Against this backdrop, the company remains confident in its long-term growth framework, citing disciplined unit development and a growing contribution to systemwide sales despite uneven near-term demand.

New restaurant openings are playing an increasingly important role in supporting systemwide performance. In the third quarter of 2025, McDonald’s reported global systemwide sales growth of more than 6% in constant currency, with management citing the increasing contribution from new unit development as an important driver. Unlike traffic-led gains, which remain sensitive to value perception and consumer sentiment, incremental unit growth provides a more predictable source of revenues, allowing the system to compound sales through footprint expansion in a challenging demand environment.

International markets remain central to this strategy. Despite near-term macro pressure, management reaffirmed its commitment to China, targeting roughly 1,000 new restaurant openings as part of its ongoing development plans. More broadly, McDonald’s continues to emphasize disciplined development across its international segments, prioritizing returns, operational consistency and long-term brand strength over aggressive acceleration. This measured approach reflects a focus on durability, ensuring expansion enhances systemwide economics rather than introducing volatility.

Looking ahead, McDonald’s remains on track to reach 50,000 restaurants globally by the end of 2027, reinforcing the scale of its development ambitions. While management has acknowledged that expansion alone will not fully offset near-term consumer pressure, continued footprint growth provides a steady foundation for systemwide sales and competitive positioning. As macro uncertainty extends into 2026, the company’s expansion strategy is likely positioned to provide a steadier underpinning for systemwide sales as consumer conditions evolve.

MCD’s Stock Price Performance, Valuation & Estimates

Shares of McDonald's have gained 3.8% in the past year against the industry’s fall of 7.9%. In the same time frame, other industry players like Starbucks Corporation SBUX, Sweetgreen, Inc. SG and Chipotle Mexican Grill, Inc. CMG have declined 9.8%, 80.1% and 36.2%, respectively.

MCD One-Year Price Performance

From a valuation standpoint, MCD trades at a forward price-to-sales (P/S) multiple of 7.65, above the industry’s average of 3.46. Conversely, industry players, such as Starbucks, Sweetgreen and Chipotle, have P/S multiples of 2.44, 1.09 and 3.80, respectively.

The Zacks Consensus Estimate for MCD’s 2026 earnings per share has declined in the past 60 days.

The company is likely to report strong earnings, with projections indicating a 9.7% rise in 2026. Conversely, industry players like Sweetgreen and Chipotle are likely to witness an increase of 15.5% and 4.7%, respectively, year over year, in 2026 earnings. Meanwhile, Starbucks' fiscal 2026 earnings are likely to witness a rise of 9.4% year over year.

MCD stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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