McDonald's Slumps as Burger King Fires on All Cylinders

McDonald's (MCD) U.S. comparable sales rose only 1% in Q2, while Burger King (part of Restaurant Brands International, or RBI, NYSE:QSR) surged 8.5%, outpacing the broader burger industry by nine points.

QSR trades at a cheaper 13x forward P/E versus MCD's 18x and has gained 9% year-to-date while McDonald's stock has fallen 17%. CEO Chris Kempczinski stated: 'We don't have a strategy problem. We simply didn't execute at the level we needed to in the second quarter.'

The underperformance is attributed to issues with the rollout of McDonald's new affordable menu, which was not implemented as planned across roughly a third of the U.S. system.