McDonald's turnaround efforts are gaining traction, according to CNBC's Jim Cramer, who believes investors will see further gains. The fast-food chain's third-quarter earnings showed improvement in its struggling U.S. business, with same-store sales declining just 0.2%, better than the 0.5% drop analysts expected. Sales even returned to growth in September after two months of declines. McDonald's shares surged 6.5% on Wednesday, extending a rebound of over 20% from their early-October lows.
Cramer, who had previously described McDonald's as a 'show me' story, now expresses optimism. 'We're seeing progress for the Golden Arches, and that's why the stock is doing so much better than it was just a couple of months ago,' he said. The company has intensified its focus on affordability, restoring digital promotions and shifting marketing toward value offerings, including $5 and $6 meal deals.
Despite the progress, challenges remain. McDonald's missed revenue expectations, and weakness in France weighed on international results. CEO Chris Kempczinski acknowledged the quarter wasn't perfect but noted interventions had stabilized guest counts. The company plans to expand value offerings, strengthen digital promotions, and improve food quality and service, with new value menus set to roll out nationwide in early 2027.
Cramer cautioned that further gains will depend on sustained execution rather than valuation alone. 'McDonald's shares were extremely compelling on a valuation basis at their lows a month ago,' he said. 'With the stock well off its lows at this point, we'll need to see continued execution for McDonald's shares to continue their run back towards the highs set earlier this year.'