McDonald's Price Cuts Can't Keep Pace With Diesel Costs
McDonald's is cutting menu prices in an effort to buy back traffic at the exact moment its franchisees' delivery costs are hitting an all-time high. The company's Q2 FY2026 earnings showed the strain, with global comparable sales growing just 1.3%, decelerating from 3.8% in the year-ago quarter.
U.S. revenue nudged up 1% to $2.726 billion, while CEO Chris Kempczinski called Q2 a 'bad execution quarter', noting that roughly a third of locations ignored value pricing.
The company is reallocating marketing dollars toward proven value offerings such as extra value meals, but with WTI crude printing $91.18 per barrel and EIA's national regular gas average at $4.157 per gallon, interest expense is guided up 4% to 6% for full-year 2026.
Investors are taking notice, with MCD stock down 14.43% over the past year and 14.17% year-to-date. Kempczinski said the U.S. should be 'fully back to where we need to be in 2027', but between now and then, someone will absorb the freight.