McDonald's Q4 revenue surges; U.S. same-store sales jump 6.8%, low-price strategy attracts "budget-conscious" consumers | Earnings Report

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McDonald's fourth-quarter results exceeded expectations, as the world's largest fast-food chain successfully attracted budget-conscious consumers with its promotional strategies.

After the U.S. stock market closed on February 11, McDonald's released its fourth-quarter financial report, with revenue reaching $7.01 billion, higher than analysts' expectations of $6.83 billion; adjusted earnings per share were $3.12, also surpassing the expected $3.04.

Same-store sales increased by 5.7% year-on-year, surpassing the market expectation of 5.1%. U.S. same-store sales jumped 6.8%, marking the fastest growth rate in more than two years. This performance was partly due to a low base caused by lower traffic in the same period last year from an E. coli outbreak, but more importantly driven by the company's promotional initiatives.

McDonald's CEO Chris Kempczinski said in the company statement that focusing on "value" successfully improved traffic in the fourth quarter. Data show that not only did U.S. market traffic increase, but the average transaction amount also rose, thanks to "successful marketing promotions."

During the quarter, McDonald's relaunched the popular Monopoly game and introduced a Christmas Grinch-themed meal, the latter of which helped the company set its best single-day sales record in history.

Analysts believe that in the context of heightened economic uncertainty, American consumers are reprioritizing their spending, and affordability has become their primary concern. This achievement is especially notable given the overall slowdown in the fast-food industry.

After the financial report was released, McDonald's share price rose as much as 2% after hours, then turned down by 0.24%. So far this year, McDonald's stock has risen nearly 6%, outperforming the S&P 500 index over the same period.

According to Black Box Intelligence, a market research firm, the U.S. restaurant industry has faced five consecutive months of slowing growth, and the consumer confidence index in January dropped to its lowest level in more than a decade. McDonald's competitors have shown mixed results: Chipotle saw a decline in same-store sales for the first time since its 2006 IPO, while Yum Brands announced it would close hundreds of underperforming Pizza Hut locations.

Economic Uncertainty Reshapes American Consumer Behavior

In the fourth quarter, all three of McDonald's business segments achieved positive comparable sales growth.

The U.S. market performed particularly strongly, with same-store sales jumping 6.8%, reversing the 2024 same period's -1.4% negative growth. This growth was mainly driven by successful marketing promotions, boosting both average ticket and traffic.

Affordability has become U.S. consumers' top concern, as economic uncertainty squeezes household budgets and puts pressure on food and household goods retailers' revenue. Kempczinski stated on Wednesday:

McDonald's leadership in value is making an impact. By listening to our customers and taking action, we've increased traffic and improved our value and price competitiveness.

International Operated Markets recorded 5.2% comparable sales growth, with nearly all markets achieving positive growth, led by the UK, Germany, and Australia. International Developmental Licensed Markets grew by 4.5%, with Japan leading and all geographic regions recording positive growth.

Both revenue and profits were strong. Fourth-quarter consolidated revenue reached $7.009 billion, up 10% year-on-year (6% at constant currency). Operating profit was $3.156 billion, up 10%. Net profit was $2.164 billion, up 7%.

Steady Full-Year Financial Growth and Robust Cash Flow

In the full year 2025, McDonald's consolidated revenue reached $26.885 billion, up 4% year-on-year (2% at constant currency).

Operating profit was $12.393 billion, up 6% (4% at constant currency). Net profit was $8.563 billion, up 4%, with diluted earnings per share of $11.95, up 5%.

Cash flow was excellent. Full-year operating cash flow was $10.551 billion, a significant increase from last year's $9.447 billion. After deducting $3.365 billion in capital expenditures, free cash flow reached $7.186 billion, markedly higher than 2024's $6.672 billion. The strong free cash flow has given the company ample support for shareholder returns and strategic investments.

Notably, the 2025 financial report included a pre-tax net expense of $229 million ($0.25 per share), mainly related to restructuring costs associated with the internal modernization transformation "Accelerating the Organization."

Excluding these one-off expenses, adjusted operating profit grew 5% (3% at constant currency), and adjusted earnings per share were $12.20, up 4%.

Loyalty Program: Surging User Base and Significant Contribution

McDonald's digital strategy made significant strides in 2025.

The company's loyalty programs, operating in 70 global markets, performed exceptionally well—full-year membership system sales reached nearly $37 billion, up 20% year-on-year and exceeding a quarter of total system sales for the year.

User scale continued to expand. By the end of 2025, McDonald's had nearly 210 million 90-day active members, up 19% year-on-year. This huge and fast-growing member base not only enhances customer loyalty but also provides valuable consumption data to the company, helping with targeted marketing and product development.

The success of the membership program reflects McDonald's effectiveness in digital transformation. Through mobile apps and personalized offers, the company can better understand customer needs, improve user experience, and increase customer lifetime value. This strategy has become an important engine for driving comparable sales growth and increased traffic.

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