McDonald's Q1 2026 earnings: value menu and loyalty program drive a sales rebound
McDonald's returned to sales growth in Q1 2026, helped by value-menu deals and loyalty spending, while flagging softer U.S. company-restaurant margins.
| Q1 2026 | Reported |
|---|---|
| EPS | $2.78 |
| Revenue | $6.52B |
Figures as reported by the company to the SEC for the quarter ended March 31, 2026. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Sales at restaurants open at least a year rose 3.8% globally, a sharp turnaround from a 1.0% decline in the same quarter last year, with growth spread fairly evenly across the U.S., company-run international markets, and licensed markets abroad.
- Revenue grew 9% from a year earlier; stripping out the effect of currency swings, growth was about 4%, meaning underlying demand accounted for most of the gain rather than exchange-rate benefits.
- Net income rose 6% and per-share earnings rose 7%, with the trailing-year operating margin near 46% and net profit margin above 31% showing McDonald’s keeps a large share of each sales dollar as profit — typical for its model where most restaurants are run by independent franchisees paying rent and royalties rather than by the company directly.
- Management pointed to a relaunched Extra Value Meals lineup and new under-$3 menu items in the U.S., plus marketing pushes and new items like the Big Arch burger, as the main drivers of regaining price-sensitive customers.
- CEO Chris Kempczinski said lower-income consumers are “absolutely still declining” and that the broader economic backdrop “may be getting a little bit worse,” even as he said the company’s value push has helped win back some of that spending.
- Loyalty program members drove more than $9 billion in systemwide sales during the quarter across roughly 70 markets with the program, and over $38 billion over the trailing year, underscoring the growing role of the app-based rewards program in sales.
- Management said profit margins at U.S. company-operated restaurants were not where they want them, attributing the shortfall to higher labor costs and pricing that had been too conservative.
- For the rest of 2026, McDonald’s is targeting operating margin in the mid-to-high 40% range, plans to open about 2,600 new restaurants (roughly 2,100 net of closures), and expects favorable currency exchange rates to add $0.20 to $0.30 to full-year earnings per share.
Q1 2026 in context
| Metric | Mar 2026 | Mar 2025 | Change |
|---|---|---|---|
| Revenue | $6.5B | $6.0B | +9.4% |
| Net income | $2.0B | $1.9B | +6.2% |
| Free cash flow | $1.7B | $1.9B | -7.8% |
| Diluted EPS | $2.78 | $2.60 | +6.9% |
| Gross margin | 89.6% | 89.6% | +0.0 pts |
| Operating margin | 45.3% | 44.5% | +0.9 pts |
| Net margin | 30.4% | 31.4% | -0.9 pts |
Figures for the quarter ended Mar 2026 and the quarter ended Mar 2025, as reported to the SEC.
How the stock took it
McDonald's Corp closed at $284.10 on May 6, 2026, the last session before the report, and at $275.75 on May 8, 2026, the first session after it — -2.9% across the report.
| Earlier report | Close before | Close after | Change |
|---|---|---|---|
| Nov 5, 2025 | $299.21 | $298.41 | -0.3% |
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Sources: company report · Axios · earnings call transcript · earnings call coverage