A U.S. execution miss, a leadership change, and a new growth playbook.
MCD · Earnings Call · 2026-08-04
U.S. Execution Misses
In Q2 2026, McDonald's global comparable sales grew 1.3%, but the U.S. lagged at just 0.8%. The company openly acknowledged that execution, not strategy, was the problem. The strongest-performing restaurants consistently executed the new EDAP menu and delivered strong operations; the rest of the system did not. "We don't have a strategy problem. We simply didn't execute at the level we needed to in the second quarter," said CEO Chris Kempczinski.
The most striking admission was the "bad trade" between value programs. To fund the under-$3 menu, the system pulled digital offers and removed the Buy One, Add One for $1 feature—alienating loyalty members. Kempczinski:
We compounded that unintentionally by our system pulled off of a lot of digital offers... That ended up being a bad trade... 2/3 of our miss in the quarter was related to that bad trade.
This is a fresh theme for McDonald's; bad trade is a new high-momentum keyword in the current quarter, not present in prior earnings calls.
Operational Overload
Beyond value, restaurant teams were overwhelmed by too many deployments—KPop Demon Hunters, the EDAP launch, the beverage platform, and the FIFA campaign (which itself underperformed). "You can imagine the number of questions that a customer asks as they pull up into the drive-thru... That's the execution opportunity I talked about." Service times rose and satisfaction scores fell. Management is simplifying the calendar and eliminating noncustomer-facing activities.
New Leadership, New Playbook
The response is a leadership change: Skye Anderson becomes U.S. President, replacing Joe Erlinger, and the company unveiled McDonald's > NEXT, a new strategy focused on taste, quality, and hospitality. "Next is now," said Kempczinski. The company also pushed its 50,000-restaurant target from 2027 to 2028, acknowledging inflation and a pressured consumer.
Bright Spots and Fundamentals
Despite the U.S. stumble, the beverage platform (launched in the U.S., Canada, and Germany) delivered strong early results—higher checks, new occasions, and strong food attachment. International markets (IOM, IDL) posted solid comps of 1.5% and 1.9%. Fundamentals remain healthy: Operating income rose 12% y/y in Q1, and adjusted operating margin was 46.9% year-to-date—though the U.S. issues will test that resilience in Q2.
The stock is already paying a price: MCD is down ~13% in the last 90 days and 20% from its February peak, reflecting the market's disappointment.
Contrast with Prior Quarters
Just three months ago, on the Q1 call (May 7, 2026), Kempczinski said: "Our focus is on what we can control. And on that score, I feel very good about the balance of the year." Even earlier, in February, he acknowledged it "looks great on paper" but needed execution. The shift is stark: from confidence to "bad trade" in one quarter.
The coming Investor Day on September 23 will be the test—can McDonald's translate this admission into a credible plan to restore U.S. momentum?