MCD Earnings Beat Masks Ongoing US Traffic Challenges

McDonald's Corporation (MCD) recently reported its Q2 earnings, which beat expectations but also highlighted ongoing challenges in the US market. Adjusted earnings rose to $3.38 per share, a 6% increase from last year and 1.8% above the Zacks Consensus Estimate of $3.32.

However, revenues fell short at $7.10 billion, missing the consensus mark of $7.14 billion by 0.5%. Despite this, franchised restaurant margins increased to $3.71 billion and represented roughly 90% of total restaurant margin dollars, up 4.3% from last year.

US comparable sales rose 0.8%, supported by positive average check growth and favorable product mix, but lower guest counts limited the result. Management attributed this decline to value execution issues, which accounted for about two-thirds of the customer traffic shortfall versus expectations.