Q4 2025 McDonalds Corp Earnings Call

February 11, 2026

Speaker #1: Hello and welcome to McDonald's Fourth Quarter 2025 Investor Conference Call. At the request of McDonald's Corporation, this conference is being recorded. Following today's presentation, there will be a question-and-answer session for investors.

Speaker #1: At this time, investors may ask a question by pressing star 1 on their touch-tone telephone. I would now like to turn the conference over to Mr. Dexter Congbalay, Vice President of Investor Relations for McDonald's Corporation.

Speaker #1: Mr. Congbalay, you may begin.

Speaker #2: Good afternoon, everyone, and thank you for joining us. With me on the call today are Chairman and Chief Executive Officer Chris Kempczinski, Chief Financial Officer Ian Borden, and Chief Restaurant Experience Officer Jill McDonald.

Speaker #2: As a reminder, the forward-looking statements on our earnings release and 8-K filing also apply to our comments on the call today. Both of those documents are available on our website, as are reconciliations of any non-GAAP financial measures mentioned on today's call.

Speaker #2: Along with their corresponding GAAP measures. Following prepared remarks this morning, we will take your questions. Please limit yourself to one question and then re-enter the queue for any additional questions.

Speaker #2: Today's conference call is being webcast and is also being recorded for replay on our website. And now I'll turn it over to Chris.

Speaker #3: Good afternoon, everyone, and thank you for joining us today. I want to start by recognizing the resilience and commitment of the McDonald's system. Our franchisees, suppliers, and employees showed up for our customers and supported communities to close the year with strong momentum and a solid foundation heading into 2026.

Speaker #3: In 2025, McDonald's delivered system-wide sales of nearly $140 billion, up 5.5% in constant currency for the full year. This reflects solid comp sales growth of more than 3% for the full year, and over 5.5% in the fourth quarter with strong growth across all segments.

Speaker #3: Our system-wide sales growth also reflects the benefit of our accelerating pace of new restaurant openings. In 2025, we opened 2,275 restaurants, on top of the more than 2,000 restaurants we opened in each of the prior two years, all while we've continued to see attractive returns from these new restaurants.

Speaker #3: Our pace of new store openings will accelerate further as we target approximately 2,600 gross restaurant openings in 2026, which keeps us on track to achieve $50,000 restaurants by the end of 2027.

Speaker #3: Despite a challenging industry backdrop, our system stayed agile throughout 2025 by concentrating on what we can control. As we look to 2026, success will again depend on going three for three.

Speaker #3: Compelling value that brings customers in the door, breakthrough marketing that creates meaningful moments for our fans, and menu innovation that provides great-tasting food for our customers.

Speaker #3: We believe this disciplined focus enables McDonald's to outperform in any environment. Let's start with value. We've listened to customers and adjusted along the way, with a relentless focus on delivering leadership in value and affordability.

Speaker #3: And our efforts are working. In the U.S., we launched McValue at the start of the year, which drove immediate incrementality, and then we relaunched Extra Value Meals in September.

Speaker #3: As we've said before, we'll measure success of our EVM program in two ways: through our ability to gain share of low-income traffic, and by improving value and affordability experience scores.

Speaker #3: I'm pleased to say that our EVM performance in the fourth quarter is exactly where we had hoped to be at this point. Together with McValue and exciting marketing, we gained share with low-income consumers in December and we've seen a meaningful increase in our value and affordability scores.

Speaker #3: Predictably, as U.S. franchisees provided these stronger value offerings throughout the year, their cash flow grew versus the prior year. In our Big Five international operated markets, we've offered everyday affordable price options, or EDAP, and menu bundles since early 2025.

Speaker #3: As awareness for these programs has grown, we've seen value and affordability scores steadily improve throughout the year. Which also tells us they're resonating with customers.

Speaker #3: As I've said before, and I will say again, McDonald's is not going to get beat on value and affordability. It's in our DNA and we will remain agile to respond as appropriate to a dynamic competitive landscape.

Speaker #3: That takes us to marketing. We once again activated in ways that reached far beyond our restaurants and into global culture in 2025. The Minecraft movie collaboration was our largest global campaign ever, bringing together two iconic fandoms across more than 100 markets and 37,000 restaurants.

Speaker #3: And most recently, the Grinch returned after first debuting in Canada in 2024. The campaign, which came to life in several markets in 2025, drove extraordinary excitement, sparking sellouts and becoming a true holiday moment for millions of families.

Speaker #3: With the inclusion of Grinch-themed collectible socks in many markets, we were the largest seller of socks in the world for nearly a week. We sold about 50 million pairs globally across the first few days of the campaign.

Speaker #3: Both record-setting programs show how uniquely positioned McDonald's is to tap into culture at massive scale, reinforcing the power of a One McDonald's way of marketing, and our ability to share creative excellence across the system.

Speaker #3: The last element of our trifecta is menu innovation. We saw strong performance from the return of Snack Wraps in the U.S., the debut of McWings in Australia, and the introduction of the Big Arch in several markets.

Speaker #3: Each resonating with different customer segments and bringing excitement to our menu. As we build what's next, we're grounding our work in a sharper focus on taste and quality, creating dishes that feel unmistakably McDonald's and resonate with customers around the world.

Speaker #3: There is so much exciting work happening in this space. In a few minutes, Jill McDonald, our Chief Restaurant Experience Officer, which includes leading the global category management teams will share more of what's coming this year.

Speaker #3: I was recently in Australia and saw firsthand how they're going three for three with value, marketing, and menu to win. Our close partnership with franchisees is driving strong momentum in the market.

Speaker #3: It's proof of what happens when you hit the mark on all three, driving strong business momentum and market share gains. With that, I'll turn it over to Ian to talk through our 2025

Speaker #3: results in more detail. Thanks,

Speaker #4: Chris, and good afternoon, everyone. As Chris mentioned, I'm proud of what the McDonald's system accomplished amid a challenging year for the industry. In the fourth quarter, we delivered strong comp sales, revenue, and earnings growth, while also driving improvements in overall customer satisfaction scores across our top 10 markets in aggregate.

Speaker #4: Specifically in the fourth quarter, global comparable sales were up 5.7%, with positive comparable guest counts. In the U.S., comp sales for the quarter were up 6.8%, which was above our expectations and was driven by positive check and guest count growth.

Speaker #4: While some of the performance is attributable to easier prior-year comparisons, it largely reflects the success of value, menu, and marketing initiatives that supported steady improvement in our baseline momentum.

Speaker #4: Together, these drove the highest quarterly comparable guest count gap to near-end competitors in recent history, and set a solid foundation for 2026. Two marketing initiatives contributed to our strong performance.

Speaker #4: First, we kicked off the fourth quarter with Monopoly, which resulted in one of our largest digital customer acquisition events ever. Today, we have about 46 million 90-day active users in our U.S.

Speaker #4: Loyalty app. And during the Monopoly event, we saw nearly 500 million games played. Second, we closed out the quarter with the Grinch meal, which set new sales records, including the highest single sales day in our history.

Speaker #4: Overall, for the entire campaign, we sold nearly as many Grinch meals as our highly successful 2025 Minecraft movie meal and 2024 collector cups promotions combined.

Speaker #4: The Grinch meal captured fans' attention, a true testament to the power of the McDonald's brand with the right marketing execution. In addition to these marketing events, as Chris mentioned, in early September, we relaunched Extra Value Meals to address customer value perceptions of our core menu offerings.

Speaker #4: In the fourth quarter, we increasingly saw evidence that this was working as intended. In addition to the improving trends in low-income share and value and affordability experience scores, the program drove improvements in units sold for our top EVMs, supported by the nationally price-pointed $5 sausage, egg, and cheese McGriddles meal, and $8 10-piece chicken McNuggets meal in November.

Speaker #4: The momentum has continued in January, behind the support of the nationally price-pointed $5 Sausage McMuffin with Egg meal, and $8 two Snack Wrap meal, and we remain on track to achieve our targets for incremental traffic associated with the EVM relaunch.

Speaker #4: Turning to our International Operated Markets, comp sales were up 5.2% in the segment, marking a third consecutive quarter of comp growth above 4%, despite the challenging industry backdrop.

Speaker #4: Strong execution in the U.K., Germany, and Australia drove performance, with each market delivering comp sales growth in the mid- to high-single digits. Momentum behind McDonald's U.K.'s turnaround continued in the fourth quarter, with market share gains for the first time in over a year, behind the execution of several exciting promotions.

Operator: Hello and welcome to McDonald's Q4 2025 Investor Conference Call. At the request of McDonald's Corporation, this conference is being recorded. Following today's presentation, there will be a question and answer session for investors. At that time, investors only may ask a question by pressing star one on their touch tone telephone. I would now like to turn the conference over to Mr. Dexter Congbalay, Vice President of Investor Relations for McDonald's Corporation. Mr. Congbalay, you may begin.

Speaker #4: As in the U.S., the Grinch campaign also exceeded expectations. And featured McShaker fries and special heist campaign, which is the U.K.'s version of edition socks.

Speaker #4: The menu from our popular Taste of the World promotion in other markets showcased the global strength of the brand by offering customers a curated selection of international menu favorites at their local McDonald's restaurant.

Dexter Congbalay: Good afternoon, everyone, and thank you for joining us. With me on the call today are Chairman and Chief Executive Officer Chris Kempczinski, Chief Financial Officer Ian Borden, and Chief Restaurant Experience Officer Jill McDonald. As a reminder, the forward-looking statements on our earnings release and 8-K filing also apply to our comments on the call today. Both of those documents are available on our website, as are reconciliations of any non-GAAP financial measures mentioned on today's call, along with their corresponding GAAP measures. Following prepared remarks this morning, we will take your questions. Please limit yourself to one question and then re-enter the queue for any additional questions. Today's conference call is being webcast and is also being recorded for replay on our website. And now I'll turn it over to Chris.

Speaker #4: This promotion delivered sustained strong performance through its six-week run, and given the success we've seen in the U.K. and other markets, we plan to expand it to even more markets in 2026.

Speaker #4: Germany and Australia also went 3 for 3 on executing value, menu, and marketing initiatives. Resulting in share gains in each market in the fourth quarter.

Dexter Congbalay: Both of those documents are available on our website, as are reconciliations of any non-GAAP financial measures mentioned on today's call, along with their corresponding GAAP measures. Following prepared remarks this morning, we will take your questions. Please limit yourself to one question and then re-enter the queue for any additional questions. Today's conference call is being webcast and is also being recorded for replay on our website. And now I'll turn it over to Chris.

Speaker #4: Both markets leveraged solid foundations in value offerings and capitalized on strong marketing campaigns. Germany's strong performance reflected the annual return of the Big Rösti, a large-format burger, as well as a Friends TV show-themed marketing campaign that was similar to a successful promotion in Spain just over a year ago, and which we also plan to expand to more international markets in 2026.

Chris Kempczinski: Good afternoon, everyone, and thank you for joining us today. I want to start by recognizing the resilience and commitment of the McDonald's system. Our franchisees, suppliers, and employees showed up for our customers and supported communities to close the year with strong momentum and a solid foundation heading into 2026. In 2025, McDonald's delivered system-wide sales of nearly $140 billion, up 5.5% in constant currency for the full year. This reflects solid comp sales growth of more than 3% for the full year and over 5.5% in the fourth quarter with strong growth across all segments. Our system-wide sales growth also reflects the benefit of our accelerating pace of new restaurant openings. In 2025, we opened 2,275 restaurants on top of the more than 2,000 restaurants we opened in each of the prior two years, all while we've continued to see attractive returns from these new restaurants.

Speaker #4: And in Australia, the breakfast daypart drove performance through menu innovations such as matcha lattes, the Brekkie Wrap, and McGriddles, while the highly successful Grinch promotion highlighted innovative menu offerings such as the Chicken Big Mac and McWings, and a special hotcake syrup sauce.

Speaker #4: Finally, in our International Developmental Licensed Markets, comp sales for the quarter were up 4.5%, led by Japan, with all geographic regions reflecting comp sales growth.

Chris Kempczinski: This reflects solid comp sales growth of more than 3% for the full year and over 5.5% in the fourth quarter with strong growth across all segments. Our system-wide sales growth also reflects the benefit of our accelerating pace of new restaurant openings. In 2025, we opened 2,275 restaurants on top of the more than 2,000 restaurants we opened in each of the prior two years, all while we've continued to see attractive returns from these new restaurants.

Speaker #4: Japan's performance has been consistently strong all year, it was supported in the fourth quarter by the launch of the My McDonald's Rewards loyalty program, marking a significant milestone in our global digital strategy.

Speaker #4: In China, although the market continued to face macroeconomic pressures, we maintained share in more than 1,000 restaurants in 2025, and now have a presence. In the quarter, in addition, we opened more restaurants in every province.

Chris Kempczinski: Our pace of new store openings will accelerate further as we target approximately 2,600 gross restaurant openings in 2026, which keeps us on track to achieve 50,000 restaurants by the end of 2027. Despite a challenging industry backdrop, our system stayed agile throughout 2025 by concentrating on what we can control. As we look to 2026, success will again depend on going three for three: compelling value that brings customers in the door, breakthrough marketing that creates meaningful moments for our fans, and menu innovation that provides great-tasting food for our customers. We believe this disciplined focus enables McDonald's to outperform in any environment. Let's start with value. We've listened to customers and adjusted along the way with a relentless focus on delivering leadership in value and affordability, and our efforts are working.

Speaker #4: Turning to the P&L, adjusted earnings per share was $3.12 for the quarter, which includes a 10-cent benefit from foreign currency translation. Adjusted earnings per share on a constant currency basis increased 7% versus the prior-year quarter, reflecting sales-driven margin contribution.

Speaker #4: Our total adjusted operating margin for the full year was 46.9%, in line with our expectations and reflecting the strength of our business model and the resilience of our system.

Speaker #4: Total restaurant margin dollars were more than $15 billion for the year. As we look back on the full year, our capital expenditure spend was $3.4 billion, slightly above the high end of the range that we provided for the year, as we invested more toward our future year development pipeline.

Chris Kempczinski: We believe this disciplined focus enables McDonald's to outperform in any environment. Let's start with value. We've listened to customers and adjusted along the way with a relentless focus on delivering leadership in value and affordability, and our efforts are working.

Speaker #4: Setting us up for success as we continue to increase our pace of openings in our wholly owned markets. I'm proud of what McDonald's has been able to deliver in a challenging environment, and we believe that we are well positioned to deliver solid results in 2026.

Chris Kempczinski: In the US, we launched McValue at the start of the year, which drove immediate incrementality, and then we relaunched Extra Value Meals in September. As we've said before, we'll measure success of our EVM program in two ways: through our ability to gain share of low-income traffic and by improving value and affordability experience scores. I'm pleased to say that our EVM performance in the fourth quarter is exactly where we had hoped to be at this point. Together with McValue and exciting marketing, we gained share with low-income consumers in December, and we've seen a meaningful increase in our value and affordability scores. Predictably, as US franchisees provided these stronger value offerings throughout the year, their cash flow grew versus the prior year. In our Big Five International Operated Markets, we've offered Everyday Affordable Price options, or EDAP, and menu bundles since early 2025.

Speaker #4: And with that, let me hand it over to

Speaker #4: Jill: Thanks, Ian, and good afternoon,

Speaker #2: everyone. I'm pleased to be here today to share more about the work of our restaurant experience teams and preview what's coming in 2026. It's been nine months since we established the global restaurant experience team, and when we announced this change, we noted that it would be significant for two reasons.

Chris Kempczinski: Together with McValue and exciting marketing, we gained share with low-income consumers in December, and we've seen a meaningful increase in our value and affordability scores. Predictably, as US franchisees provided these stronger value offerings throughout the year, their cash flow grew versus the prior year. In our Big Five International Operated Markets, we've offered Everyday Affordable Price options, or EDAP, and menu bundles since early 2025.

Speaker #2: First, our new integrated structure sets us up to execute with greater pace, which means ideas can start showing up in our restaurants even sooner.

Speaker #2: We can develop and scale product innovations faster than ever before, with menu, supply chain, and operations all in one team. And second, our new category structure, with dedicated leaders for beef, beverages, and chicken, would give us better accountability and a sharper line of sight into what it takes to win in each of these large and growing verticals.

Chris Kempczinski: As awareness for these programs has grown, we've seen value and affordability scores steadily improve throughout the year, which also tells us they're resonating with customers. As I've said before, and I will say again, McDonald's is not going to get beat on value and affordability. It's in our DNA, and we will remain agile to respond as appropriate to a dynamic competitive landscape. That takes us to marketing. We once again activated in ways that reached far beyond our restaurants and into global culture in 2025. The Minecraft movie collaboration was our largest global campaign ever, bringing together two iconic fandoms across more than 100 markets and 37,000 restaurants. And most recently, The Grinch returned after first debuting in Canada in 2024. The campaign, which came to life in several markets in 2025, drove extraordinary excitement, sparking sellouts and becoming a true holiday moment for millions of families.

Speaker #2: We know that while value remains important for customers, delivering great taste and quality are their top needs, and that's at the center of everything we're doing across the restaurant experience.

Speaker #2: With that context, let me share more on each of the three categories. Starting with beef, we've continued rolling out best burger, which is now in more than 85 markets and on track to deliver on our commitment to be a nearly all-markets by the end of 2026.

Chris Kempczinski: The Minecraft movie collaboration was our largest global campaign ever, bringing together two iconic fandoms across more than 100 markets and 37,000 restaurants. And most recently, The Grinch returned after first debuting in Canada in 2024. The campaign, which came to life in several markets in 2025, drove extraordinary excitement, sparking sellouts and becoming a true holiday moment for millions of families.

Speaker #2: Best burger is the key to hotter, juicier, and even tastier burgers, which improve customer satisfaction scores and streamline operations for restaurant crew. We also began to pilot big arch about a year and a half ago and it's shown strong traction across several markets.

Speaker #2: Customers are responding to this delicious, more satisfying burger that meets their demand for something heartier, while still feeling distinctly McDonald's. Its strong performance helped it most recently earn a permanent spot on the U.K.

Chris Kempczinski: With the inclusion of Grinch-themed collectible socks in many markets, we were the largest seller of socks in the world for nearly a week. We sold about 50 million pairs globally across the first few days of the campaign. Both record-setting programs show how uniquely positioned McDonald's is to tap into culture at massive scale, reinforcing the power of a One McDonald's way of marketing and our ability to share creative excellence across the system. The last element of our trifecta is menu innovation. We saw strong performance from the return of snack wraps in the US, the debut of McWings in Australia, and the introduction of the Big Arch in several markets, each resonating with different customer segments and bringing excitement to our menu.

Speaker #2: menu. We see potential to continue scaling this platform as we strengthen our position within this tier of the beef category. Now, let's turn to beverages.

Speaker #2: We are excited about the global beverage opportunity of more than $100 billion. You can expect to see new offerings in the U.S., as well as select international markets in 2026.

Chris Kempczinski: The last element of our trifecta is menu innovation. We saw strong performance from the return of snack wraps in the US, the debut of McWings in Australia, and the introduction of the Big Arch in several markets, each resonating with different customer segments and bringing excitement to our menu.

Speaker #2: Designed to capture share of this large and fast-growing category, we're exploring energy, indulgent iced coffees, fruity refreshers, and crafted sodas. We're thrilled to launch our new U.S.

Chris Kempczinski: As we build what's next, we're grounding our work in a sharper focus on taste and quality, creating dishes that feel unmistakably McDonald's and resonate with customers around the world. There is so much exciting work happening in this space. In a few minutes, Jill McDonald, our Chief Restaurant Experience Officer, which includes leading the global category management teams, will share more of what's coming this year. I was recently in Australia and saw firsthand how they're going three for three with value, marketing, and menu to win. Our close partnership with franchisees is driving strong momentum in the market. It's proof of what happens when you hit the mark on all three, driving strong business momentum and market share gains. With that, I'll turn it over to Ian to talk through our 2025 results in more detail.

Speaker #2: Beverage lineup later this year under the McCafé brand. It builds on a highly successful test that exceeded expectations in the fourth quarter across more than 500 U.S. restaurants.

Speaker #2: restaurants. As we've said before, the new beverage offerings drove incremental occasions across different day parts, as well as higher average check, including strong results from our Red Bull collaboration, which we plan to continue building in both the U.S.

Chris Kempczinski: I was recently in Australia and saw firsthand how they're going three for three with value, marketing, and menu to win. Our close partnership with franchisees is driving strong momentum in the market. It's proof of what happens when you hit the mark on all three, driving strong business momentum and market share gains. With that, I'll turn it over to Ian to talk through our 2025 results in more detail.

Speaker #2: And beyond. We're applying learnings from the U.S. test as we expand offerings across the system. Australia, for example, ran a small beverage test at the end of 2025 and adapted those insights by refining some of the recipes and tailoring some of the flavor profiles to meet local preferences.

Ian Borden: Thanks, Chris, and good afternoon, everyone. As Chris mentioned, I'm proud of what the McDonald's system accomplished amid a challenging year for the industry. In Q4, we delivered strong comp sales, revenue, and earnings growth while also driving improvements in overall customer satisfaction scores across our top 10 markets in aggregate. Specifically in Q4, global comparable sales were up 5.7% with positive comparable guest counts. In the US, comp sales for the quarter were up 6.8%, which was above our expectations and was driven by positive check and guest count growth. While some of the performance is attributable to easier prior-year comparisons, it largely reflects the success of value, menu, and marketing initiatives that supported steady improvement in our baseline momentum. Together, these drove the highest quarterly comparable guest count gap to near-in-competitors in recent history and set a solid foundation for 2026.

Speaker #2: Lastly, chicken. Just as a reminder, this global category is two times the size of beef and faster growing. We grew our chicken category share across our top 10 markets in 2025, and believe we're well on our way to increasing our share by at least 1 percentage point by the end of 2026, versus where we were in December 2023.

Ian Borden: Specifically in Q4, global comparable sales were up 5.7% with positive comparable guest counts. In the US, comp sales for the quarter were up 6.8%, which was above our expectations and was driven by positive check and guest count growth. While some of the performance is attributable to easier prior-year comparisons, it largely reflects the success of value, menu, and marketing initiatives that supported steady improvement in our baseline momentum. Together, these drove the highest quarterly comparable guest count gap to near-in-competitors in recent history and set a solid foundation for 2026.

Speaker #2: At the foundational level, we achieved our target of deploying them at Crispy Sandwich equity to nearly all major markets by the end of 2025.

Speaker #2: And on the innovation front, many of you have spotted something cooking at a few restaurants in the Chicagoland area. We're in the early stages of testing new flavor combinations and new ways of cooking, as we continue to explore great-tasting recipes for customers to enjoy.

Speaker #2: While I've shared how speed and scale show up across the three menu categories, innovation at McDonald's doesn't stop there. The same disciplined approach is guiding the technology advancements coming to life in our restaurants, rounding out what it truly means to deliver the full McDonald's restaurant experience.

Ian Borden: Two marketing initiatives contributed to our strong performance. First, we kicked off Q4 with Monopoly, which resulted in one of our largest digital customer acquisition events ever. Today, we have about 46 million 90-day active users in our US loyalty app, and during the Monopoly event, we saw nearly 500 million games played. Second, we closed out the quarter with the Grinch meal, which set new sales records, including the highest single sales day in our history. Overall, for the entire campaign, we sold nearly as many Grinch meals as our highly successful 2025 Minecraft movie meal, and 2024 Collector Cups promotions combined. The Grinch meal captured fans' attention, a true testament to the power of the McDonald's brand with the right marketing execution.

Speaker #2: The restaurant experience team is using these tests to learn quickly and apply those learnings to capabilities like voice ordering, shift management tools, and other AI-enabled tools and digital enhancements that help make running great restaurants easier and more enjoyable for both crew and customers.

Speaker #2: Taken together, these efforts reflect how we are continuously innovating and improving the full scope of the McDonald's experience, bringing forward even more delicious food, smarter operations, thoughtful design, and technology that meets customers and our restaurant teams where they are.

Ian Borden: Overall, for the entire campaign, we sold nearly as many Grinch meals as our highly successful 2025 Minecraft movie meal, and 2024 Collector Cups promotions combined. The Grinch meal captured fans' attention, a true testament to the power of the McDonald's brand with the right marketing execution.

Speaker #2: It's all part of how we're modernizing the way McDonald's shows up every day. And now, I'll turn it back over to Ian.

Speaker #3: Thanks, Jill. As we look ahead to 2026, we remain confident in our strategy and our ability to outperform our competitors in any operating environment by focusing on what we can control, and by leveraging our global scale and financial strength.

Ian Borden: In addition to these marketing events, as Chris mentioned, in early September, we relaunched extra value meals to address customer value perceptions of our core menu offerings. In the fourth quarter, we increasingly saw evidence that this was working as intended. In addition to the improving trends in low-income share and value and affordability experience scores, the program drove improvements in units sold for our top EVMs, supported by the nationally price-pointed $5 sausage, egg, and cheese McGriddles meal and $8 10-piece Chicken McNuggets meal in November. The momentum has continued in January, behind the support of the nationally price-pointed $5 sausage McMuffin with egg meal and $8 two-snack wrap meal, and we remain on track to achieve our targets for incremental traffic associated with the EVM relaunch.

Speaker #3: We believe the underlying assumptions for our 2026 outlook are prudent and reflect our expectations that the QSR industry environments in the U.S. and across many markets will remain challenging.

Speaker #3: Should the environment improve beyond our expectations, we believe McDonald's is well positioned to benefit disproportionately relative to our competitors. We expect that net restaurant expansion in 2026, along with restaurants we opened in 2025, will contribute approximately 2.5% to system-wide sales growth.

Ian Borden: The momentum has continued in January, behind the support of the nationally price-pointed $5 sausage McMuffin with egg meal and $8 two-snack wrap meal, and we remain on track to achieve our targets for incremental traffic associated with the EVM relaunch.

Speaker #3: We expect our operating margin to be in the mid to high 40% range and to expand from our 46.9% adjusted operating margin in 2025.

Ian Borden: Turning to our international operated markets, comp sales were up 5.2% in the segment, marking a third consecutive quarter of comp growth above 4% despite the challenging industry backdrop. Strong execution in the UK, Germany, and Australia drove performance, with each market delivering comp sales growth in the mid to high single digits. Momentum behind McDonald's UK's turnaround continued in Q4, with market share gains for the first time in over a year behind the execution of several exciting promotions. As in the US, the Grinch campaign also exceeded expectations and featured McShaker fries and special edition socks. The Menu Heist campaign, which is the UK's version of our popular Taste of the World promotion in other markets, showcased the global strength of the brand by offering customers a curated selection of international menu favorites at their local McDonald's restaurant.

Speaker #3: We're targeting G&A as a percentage of system-wide sales for the full year to be about 2.2%, reflecting our ongoing investments in our strategic growth drivers like technology and digital, and Global Business Services, or GBS.

Speaker #3: These investments are designed to unlock efficiencies in running the business and to support long-term growth for our people and stakeholders. Below the operating line, we expect interest expense to increase between 4% to 6% from the prior year, primarily due to higher average interest rates, and expect our full-year effective tax rate to be between 21% and 23%.

Ian Borden: As in the US, the Grinch campaign also exceeded expectations and featured McShaker fries and special edition socks. The Menu Heist campaign, which is the UK's version of our popular Taste of the World promotion in other markets, showcased the global strength of the brand by offering customers a curated selection of international menu favorites at their local McDonald's restaurant.

Speaker #3: With some volatility quarter to quarter that may cause the quarterly rate to be outside the annual range. We expect foreign currency to be a full-year tailwind to 2026 EPS, totaling in the range of 20 cents to 30 cents based on current exchange rates.

Ian Borden: This promotion delivered sustained strong performance through its six-week run, and given the success we've seen in the UK and other markets, we plan to expand it to even more markets in 2026. Germany and Australia also went three for three on executing value, menu, and marketing initiatives, resulting in share gains in each market in Q4. Both markets leveraged solid foundations in value offerings and capitalized on strong marketing campaigns. Germany's strong performance reflected the annual return of the Big Rosti, a large-format burger, as well as a Friends TV show-themed marketing campaign that was similar to a successful promotion in Spain just over a year ago and which we also plan to expand to more international markets in 2026.

Speaker #3: As always, this is directional guidance only, as rates will likely change as we move through the remainder of the year. Turning to capital allocation, we're committed to maintaining financial discipline and creating value for our shareholders over the longer term.

Speaker #3: Our priorities remain unchanged. First, we look to invest in the business to drive growth, including capital expenditures to primarily support new restaurant openings, as well as investments in technology, digital, and GBS.

Ian Borden: Both markets leveraged solid foundations in value offerings and capitalized on strong marketing campaigns. Germany's strong performance reflected the annual return of the Big Rosti, a large-format burger, as well as a Friends TV show-themed marketing campaign that was similar to a successful promotion in Spain just over a year ago and which we also plan to expand to more international markets in 2026.

Speaker #3: Second, we prioritize our dividend, which is increased in each of the last 49 years. And third, we repurchase shares with remaining free cash flow over time.

Speaker #3: With respect to restaurant development and capital expenditures, as Chris mentioned, we continue to accelerate our pace of new unit openings and remain on track to achieve our target of 50,000 restaurants by the end of 2027.

Ian Borden: And in Australia, the Breakfast Day part drove performance through menu innovations such as matcha lattes, the Brekky wrap, and McGriddles, while the highly successful Grinch promotion highlighted innovative menu offerings such as the Chicken Big Mac, McWings, and a special hot cake syrup sauce. Finally, in our international developmental license markets, comp sales for the quarter were up 4.5%, led by Japan, with all geographic regions reflecting comp sales growth. Japan's performance has been consistently strong all year. It was supported in the fourth quarter by the launch of the My McDonald's Rewards loyalty program, marking a significant milestone in our global digital strategy. In China, although the market continued to face macroeconomic pressures, we maintained share in the quarter. In addition, we opened more than 1,000 restaurants in 2025 and now have a presence in every province.

Speaker #3: In 2025, we exceeded our openings plan for the year, with gross openings of about 2,275 restaurants and net openings of 1,880. And in 2026, we're targeting approximately 2,600 gross restaurant openings, with about 750 of these in our U.S.

Speaker #3: and IOM segments. We expect to open more than 1,800 restaurants in our IDL segment, including about 1,000 in China, overall. We anticipate about 4.5% unit growth from the approximately 2,100 net restaurant additions in 2026.

Ian Borden: It was supported in the fourth quarter by the launch of the My McDonald's Rewards loyalty program, marking a significant milestone in our global digital strategy. In China, although the market continued to face macroeconomic pressures, we maintained share in the quarter. In addition, we opened more than 1,000 restaurants in 2025 and now have a presence in every province.

Speaker #3: We expect our capital expenditure spend to be between $3.7 and $3.9 billion this year, with the majority invested in new unit openings across our U.S.

Ian Borden: Turning to the P&L, adjusted earnings per share was $3.12 for the quarter, which includes a $0.10 benefit from foreign currency translation. Adjusted earnings per share on a constant currency basis increased 7% versus the prior-year quarter, reflecting sales-driven margin contribution. Our total adjusted operating margin for the full year was 46.9%, in line with our expectations and reflecting the strength of our business model and the resilience of our system. Total restaurant margin dollars were more than $15 billion for the year. As we look back on the full year, our capital expenditure spend was $3.4 billion, slightly above the high end of the range that we provided for the year as we invested more toward our future year development pipeline, setting us up for success as we continue to increase our pace of openings in our wholly owned markets.

Speaker #3: and IOM segments. This increase in capex versus the prior year of $3.4 billion is in line with the targeted increase of about $300 to $500 million that we outlined at our December 23 Investor Day.

Speaker #3: Lastly, we're targeting our net income to free cash flow conversion rate in 2026 to be in the low to mid-80% range, which is in line with the 84% in 2025.

Speaker #3: And with that, let me hand it back over to Chris.

Ian Borden: Total restaurant margin dollars were more than $15 billion for the year. As we look back on the full year, our capital expenditure spend was $3.4 billion, slightly above the high end of the range that we provided for the year as we invested more toward our future year development pipeline, setting us up for success as we continue to increase our pace of openings in our wholly owned markets. I'm proud of what McDonald's has been able to deliver in a challenging environment, and we believe that we are well-positioned to deliver solid results in 2026. With that, let me hand it over to Jill.

Speaker #2: Thanks, Ian. As we close the books in 2025, it's only natural to reflect not just on the year that was, but on how far we've come since announcing accelerating the arches in November 2020 and expanding our ambitions in December 2023.

Speaker #2: We made bold commitments to grow our business. We've made great progress on our accelerator priorities, and we've become a fundamentally different company. You heard from Jill how that transformation is coming to life across the restaurant experience, from food to operations, design, and technology.

Ian Borden: I'm proud of what McDonald's has been able to deliver in a challenging environment, and we believe that we are well-positioned to deliver solid results in 2026. With that, let me hand it over to Jill.

Speaker #2: When we started this journey, from a company standpoint, we didn't have a global business services function. Today, we do. We didn't have revenue growth management function.

Jill McDonald: Thanks, Ian, and good afternoon, everyone. I'm pleased to be here today to share more about the work of our restaurant experience teams and preview what's coming in 2026. It's been nine months since we established the global restaurant experience team, and when we announced this change, we noted that it would be significant for two reasons. First, our new integrated structure sets us up to execute with greater pace, which means ideas can start showing up in our restaurants even sooner. We can develop and scale product innovations faster than ever before with menu supply chain and operations all in one team. And second, our new category structure with dedicated leaders for beef, beverages, and chicken would give us better accountability and a sharper line of sight into what it takes to win in each of these large and growing verticals.

Speaker #2: Now we do. We didn't have a standardized global tech stack. Today, we're close. The early benefits from these new capabilities give us a clear line of sight into how they'll unlock growth and productivity moving forward.

Speaker #2: Well, it is another great example. In November 2020, the McDonald's loyalty app was just beginning to launch in the U.S. In 2023, we had about $20 billion in system-wide sales to loyalty members across 50 markets. By 2025, we almost doubled those markets.

Jill McDonald: We can develop and scale product innovations faster than ever before with menu supply chain and operations all in one team. And second, our new category structure with dedicated leaders for beef, beverages, and chicken would give us better accountability and a sharper line of sight into what it takes to win in each of these large and growing verticals.

Speaker #2: In sales, with nearly 210 million 90-day active users across 70 markets. And we're on track to reach our target of 250 million 90-day active users by the end of 2027.

Jill McDonald: We know that while value remains important for customers, delivering great taste and quality are their top needs, and that's at the center of everything we're doing across the restaurant experience. With that context, let me share more on each of the three categories. Starting with beef, we've continued rolling out Best Burger, which is now in more than 85 markets and on track to deliver on our commitment to be in nearly all markets by the end of 2026. Best Burger is the key to hotter, juicier, and even tastier burgers, which improve customer satisfaction scores and streamline operations for restaurant crew. We also began to pilot Big Arch about a year and a half ago, and it's shown strong traction across several markets. Customers are responding to this delicious, more satisfying burger that meets their demand for something heartier while still feeling distinctly McDonald's.

Speaker #2: This matters because we know that loyalty increases visit frequency and opens the door to new ways to engage with our fans, like multi-visit bonus games—such as the Snack Crafts campaign in the U.S.—or exclusive partnerships available only through the app.

Speaker #2: Another critical proof is the connection between the app and the deployment of Ready on Arrival in our top six markets. It's already driving faster service, reducing wait times, and improving customer satisfaction.

Jill McDonald: Best Burger is the key to hotter, juicier, and even tastier burgers, which improve customer satisfaction scores and streamline operations for restaurant crew. We also began to pilot Big Arch about a year and a half ago, and it's shown strong traction across several markets. Customers are responding to this delicious, more satisfying burger that meets their demand for something heartier while still feeling distinctly McDonald's.

Speaker #2: And we expect those benefits to compound as adoption grows across the system. These touch points simply didn't exist a few years ago. When we execute, we know we can outperform the competition in any environment.

Speaker #2: What's clear is that we've earned the right to look forward. We're excited to share what's next with our system at our worldwide convention in Las Vegas in June, and we expect to share more details with all of you during an investor update sometime this fall.

Jill McDonald: Its strong performance helped it most recently earn a permanent spot on the UK menu, and we see potential to continue scaling this platform as we strengthen our position within this tier of the beef category. Now, let's turn to beverages. We are excited about the global beverage opportunity of more than $100 billion. You can expect to see new offerings in the US as well as select international markets in 2026. Designed to capture share of this large and fast-growing category, we're exploring energy, indulgent iced coffees, fruity refreshers, and crafted sodas. We're thrilled to launch our new US beverage lineup later this year under the McCafé brand. It builds on a highly successful test that exceeded expectations in Q4 across more than 500 US restaurants.

Speaker #2: Stay tuned. Before we turn to your questions, I want to again thank our franchisees, suppliers, restaurant teams, and everyone across the McDonald's system for the commitment, the partnership, and the passion that you bring to this business.

Jill McDonald: Designed to capture share of this large and fast-growing category, we're exploring energy, indulgent iced coffees, fruity refreshers, and crafted sodas. We're thrilled to launch our new US beverage lineup later this year under the McCafé brand. It builds on a highly successful test that exceeded expectations in Q4 across more than 500 US restaurants.

Speaker #2: Your dedication is the driving force behind our achievements, and what enables us to pursue this next chapter with confidence as we transform our long-term ambitions into tangible results.

Speaker #2: And with a new year well underway, we'll continue to lead, innovate, and deliver for our customers, our people, and our shareholders. Together, we will make 2026 a year that defines the future of McDonald's.

Jill McDonald: As we've said before, the new beverage offerings drove incremental occasions across different day parts as well as higher average check, including strong results from our Red Bull collaboration, which we plan to continue building in both the US and beyond. We're applying learnings from the US test as we expand offerings across the system. Australia, for example, ran a small beverage test at the end of 2025 and adapted those insights by refining some of the recipes and tailoring some of the flavor profiles to meet local preferences. Lastly, chicken. Just as a reminder, this global category is 2x the size of beef and faster growing. We grew our chicken category share across our top 10 markets in 2025 and believe we're well on our way to increasing our share by at least 1 percentage point by the end of 2026 versus where we were in December 2023.

Speaker #2: With that, we'll take your questions.

Speaker #1: Thank you. And as a reminder, if you are an investor and would like to ask a question, please press star, followed by the number one on your telephone keypad.

Speaker #1: We ask that you limit yourself to one question and requeue for any additional.

Speaker #1: questions. Our first

Speaker #3: Question today is from Dennis Geiger, UBS.

Speaker #4: Thanks. Good afternoon, guys. Appreciate the insights, and Jill, very helpful to get an update from you as well. Chris and Ian, following a strong end to 2025, you both talked about 2026.

Jill McDonald: Lastly, chicken. Just as a reminder, this global category is 2x the size of beef and faster growing. We grew our chicken category share across our top 10 markets in 2025 and believe we're well on our way to increasing our share by at least 1 percentage point by the end of 2026 versus where we were in December 2023.

Speaker #4: Could you talk a bit more on how you're thinking about the U.S. sales trajectory in 2026, given some of those sales drivers you identified and perhaps how you think about going three for three across value, marketing, and innovation to you.

Speaker #4: Drive U.S. sales growth this year? Thank you.

Jill McDonald: At the foundational level, we achieved our target of deploying them at crispy sandwich equity to nearly all major markets by the end of 2025. And on the innovation front, many of you have spotted something cooking at a few restaurants in the Chicagoland area. We're in the early stages of testing new flavor combinations and new ways of cooking as we continue to explore great tasting recipes for customers to enjoy. While I've shared how speed and scale show up across the three menu categories, innovation at McDonald's doesn't stop there. The same disciplined approach is guiding the technology advancements coming to life in our restaurants, rounding out what it truly means to deliver the full McDonald's restaurant experience.

Speaker #3: I'll start, and Ian, if you have any additional thoughts. But let's start with value. And as I mentioned in the call, the U.S. put in place a McValue program.

Speaker #3: That has performed well for us. We added to that the EVM toward the back half of the year. And as we go into 2026, McValley for us is going to continue to be the foundation for our value program.

Jill McDonald: While I've shared how speed and scale show up across the three menu categories, innovation at McDonald's doesn't stop there. The same disciplined approach is guiding the technology advancements coming to life in our restaurants, rounding out what it truly means to deliver the full McDonald's restaurant experience.

Speaker #3: It's going to be something that always continues to evolve. Joe has talked about that in the past. And there are real conversations, live conversations, going on right now in the system.

Speaker #3: But I feel really good about where McValley is headed this year. And then I think also we've seen the power of great marketing.

Jill McDonald: The restaurant experience team is using these tests to learn quickly and apply those learnings to capabilities like voice ordering, shift management tools, and other AI-enabled tools and digital enhancements that help make running great restaurants easier and more enjoyable for both crew and customers. Taken together, these efforts reflect how we are continuously innovating and improving the full scope of the McDonald's experience, bringing forward even more delicious food, smarter operations, thoughtful design, and technology that meets customers and our restaurant teams where they are. It's all part of how we're modernizing the way McDonald's shows up every day. And now, I'll turn it back over to Ian.

Speaker #3: We've seen how something like a Minecraft or Monopoly or Grinch, when you have strong value with that, can really be an accelerant for the business.

Speaker #3: And I'm feeling good about the lineup that the U.S. team has there. And then, of course, we've talked about beverages. Jill also mentioned some of the other things that we're doing.

Jill McDonald: Taken together, these efforts reflect how we are continuously innovating and improving the full scope of the McDonald's experience, bringing forward even more delicious food, smarter operations, thoughtful design, and technology that meets customers and our restaurant teams where they are. It's all part of how we're modernizing the way McDonald's shows up every day. And now, I'll turn it back over to Ian.

Speaker #3: With burgers and chicken and so I think we've got a strong slate of menu news lined up for the year as well. So now it comes down to what I talked about also in the comments, which is it looks great on paper.

Speaker #3: We've just got to go execute. But I think Joe and the team are working well with the franchisees. I know there's a lot of energy and excitement around this.

Speaker #3: And so, I'm confident we're going to go out and execute with excellence.

Ian Borden: Thanks, Jill. As we look ahead to 2026, we remain confident in our strategy and our ability to outperform our competitors in any operating environment by focusing on what we can control and by leveraging our global scale and financial strength. We believe the underlying assumptions for our 2026 outlook are prudent and reflect our expectations that the QSR industry environments in the US and across many markets will remain challenging. Should the environment improve beyond our expectations, we believe McDonald's is well-positioned to benefit disproportionately relative to our competitors. We expect that net restaurant expansion in 2026, along with restaurants we opened in 2025, will contribute approximately 2.5% to system-wide sales growth. We expect our operating margin to be in the mid to high 40% range and to expand from our 46.9% adjusted operating margin in 2025.

Speaker #2: And maybe, Dennis, just a couple of small builds to what Chris teed up. I mean, I think value and affordability, as we've talked about pretty consistently, are the green fees.

Speaker #2: I mean, you've got to have it. It's core to our DNA as a business and brand, and it's certainly core to what consumers are expecting.

Speaker #2: And I think we would say we've done a pretty good job of kind of strengthening our value and affordability with the things that Chris talked about us putting in place.

Ian Borden: Should the environment improve beyond our expectations, we believe McDonald's is well-positioned to benefit disproportionately relative to our competitors. We expect that net restaurant expansion in 2026, along with restaurants we opened in 2025, will contribute approximately 2.5% to system-wide sales growth. We expect our operating margin to be in the mid to high 40% range and to expand from our 46.9% adjusted operating margin in 2025.

Speaker #2: And that is certainly what we believe is one of the underpinnings to the momentum that we're seeing in our U.S. business. We talked about the fact that in Q4, the U.S.

Speaker #2: Had positive guest count growth, which is always a really strong indication that you’re kind of getting to that sustainable top-line growth that is going to drive both sales and more volume into the restaurants.

Speaker #2: And I think just maybe something to note that I think is another important proof point is our U.S. business had its strongest comp guest count gap to the near-end competitive set in Q4 in recent history.

Ian Borden: We're targeting G&A as a percentage of system-wide sales for the full year to be about 2.2%, reflecting our ongoing investments in our strategic growth drivers like technology and digital and global business services, or GBS. These investments are designed to unlock efficiencies in running the business and to support long-term growth for our people and stakeholders. Below the operating line, we expect interest expense to increase between 4% to 6% from the prior year, primarily due to higher average interest rates, and expect our full-year effective tax rate to be between 21% and 23%, with some volatility quarter to quarter that may cause the quarterly rate to be outside the annual range. We expect foreign currency to be a full-year tailwind to 2026 EPS, totaling in the range of $0.20 to $0.30 based on current exchange rates.

Speaker #2: So, I think those are all signs of encouragement to us. The key, though, is you've got to get the three for three. It's not just about value and affordability, or about menu, or about marketing individually.

Speaker #2: It's how you bring those together and leverage them to kind of get that holistic output that you saw us, I believe, deliver in Q4.

Speaker #2: Q4. Our next question is from

Ian Borden: Below the operating line, we expect interest expense to increase between 4% to 6% from the prior year, primarily due to higher average interest rates, and expect our full-year effective tax rate to be between 21% and 23%, with some volatility quarter to quarter that may cause the quarterly rate to be outside the annual range. We expect foreign currency to be a full-year tailwind to 2026 EPS, totaling in the range of $0.20 to $0.30 based on current exchange rates.

Speaker #3: Sarah Santor, Bank of America.

Speaker #5: Oh, thank you. I guess maybe I wanted to sort of dig in a little further on that value. I know you kind of approached it two ways.

Speaker #5: One was sort of streamlining—systematizing the approach to the meals, kind of that 15% discount to à la carte prices. Then you also pulled some very sharp price points, as you said, the five and eight.

Speaker #5: So as you think about the pricing architecture, I guess, which of those do you think was more powerful? Because I'm asking in the context of restaurant-level margins that we're sort of flat-ish year over year.

Ian Borden: As always, this is directional guidance only as rates will likely change as we move through the remainder of the year. Turning to capital allocation, we're committed to maintaining financial discipline and creating value for our shareholders over the longer term. Our priorities remain unchanged. First, we look to invest in the business to drive growth, including capital expenditures to primarily support new restaurant openings as well as investments in technology, digital, and GBS. Second, we prioritize our dividend, which has increased in each of the last 49 years. Third, we repurchase shares with remaining free cash flow over time. With respect to restaurant development and capital expenditures, as Chris mentioned, we continue to accelerate our pace of new unit openings and remain on track to achieve our target of 50,000 restaurants by the end of 2027.

Speaker #5: And so assuming maybe there's some kind of pressure from that on franchisee margins. And maybe just tacking onto that, are any of the technology solutions that Jill mentioned, are those some of the ways to kind of maybe support this sharper value?

Speaker #5: Thank you.

Speaker #3: Sure. Well, I guess I'd other. I think what we've seen and certainly what we're trying to execute is the customer absolutely wants predictable value.

Speaker #3: And having an EVM is, I think, the way historically we have always delivered for that customer—that predictable, everyday value. So you need to have that.

Ian Borden: Third, we repurchase shares with remaining free cash flow over time. With respect to restaurant development and capital expenditures, as Chris mentioned, we continue to accelerate our pace of new unit openings and remain on track to achieve our target of 50,000 restaurants by the end of 2027.

Speaker #3: And certainly, pleased with where the system in the U.S. was able to get to on that. As you well know, it's something that has been well established on our international business for years.

Speaker #3: And so we're in a good shape there as well. But then also the customer is looking for, in this environment, some price-pointed items that are offering particular value on top of to have predictable value, but the customer also needs to be excited around price-pointed items that come in and out of the menu and that's what we executed against.

Ian Borden: In 2025, we exceeded our openings plan for the year, with gross openings of about 2,275 restaurants and net openings of 1,880. In 2026, we're targeting approximately 2,600 gross restaurant openings, with about 750 of these in our US and IOM segments. We expect to open more than 1,800 restaurants in our IDL segment, including about 1,000 in China. Overall, we anticipate about 4.5% unit growth from the approximately 2,100 net restaurant additions in 2026. We expect our capital expenditure spend to be between $3.7 and 3.9 billion this year, with the majority invested in new unit openings across our US and IOM segments. This increase in CapEx versus the prior year of $3.4 billion is in line with the targeted increase of about $300 to 500 million that we outlined at our December 2023 investor day.

Speaker #2: Maybe, Sarah, just to kind of hook onto Chris margin pressure. I just think if you kind of go back to what we've talked pretty consistently about what it takes to grow margins, obviously, is strong top-line sales growth.

Speaker #2: We saw that in Q4. We grew margins in Q4, including in the U.S. on the back of that. Obviously, if you look back to earlier quarters, we had less top-line growth in the U.S.

Ian Borden: We expect our capital expenditure spend to be between $3.7 and 3.9 billion this year, with the majority invested in new unit openings across our US and IOM segments. This increase in CapEx versus the prior year of $3.4 billion is in line with the targeted increase of about $300 to 500 million that we outlined at our December 2023 investor day. Lastly, we're targeting our net income to free cash flow conversion rate in 2026 to be in the low to mid 80% range, which is in line with the 84% in 2025. With that, let me hand it back over to Chris.

Speaker #2: combined with, obviously, higher levels of inflation. I think that put more pressure on that. I think the other data point, a little bit to what Chris highlighted, which is you got to do both.

Speaker #2: I mean, at the end of the day, our owner-operator average cash flow in the U.S. was up year over year. And I think as we've talked about historically, the way you get to sustainable profitability and profitability growth is you drive more volume, more customers in restaurants.

Ian Borden: Lastly, we're targeting our net income to free cash flow conversion rate in 2026 to be in the low to mid 80% range, which is in line with the 84% in 2025. With that, let me hand it back over to Chris.

Speaker #2: And I think if we get that three for three, formula right as we've done in Q4, I think you've seen that we're clearly capable to do that and do that well.

Chris Kempczinski: Thanks, Ian. As we close the books in 2025, it's only natural to reflect not just on the year that was, but on how far we've come since announcing Accelerating the Arches in November 2020 and expanding our ambitions in December 2023. We made bold commitments to grow our business. We've made great progress on our accelerator priorities, and we've become a fundamentally different company. You heard from Jill how that transformation is coming to life across the restaurant experience, from food to operations, design, and technology. When we started this journey, from a company standpoint, we didn't have a global business services function. Today, we do. We didn't have revenue growth management function. Now, we do. We didn't have a standardized global tech stack. Today, we're close.

Speaker #3: Next question is from Brian Harbert, Morgan.

Speaker #3: Stanley.

Speaker #6: Yeah, thanks. Good

Speaker #6: Afternoon, guys. I wanted to ask about just the capital budget. I think it's generally run kind of at the higher end of, I think, where you thought it would a couple of years ago.

Speaker #6: It'll probably end up being up by a billion and a half dollars versus 23. Is that exclusively because you want to move faster on constructing new stores?

Chris Kempczinski: You heard from Jill how that transformation is coming to life across the restaurant experience, from food to operations, design, and technology. When we started this journey, from a company standpoint, we didn't have a global business services function. Today, we do. We didn't have revenue growth management function. Now, we do. We didn't have a standardized global tech stack. Today, we're close.

Speaker #6: Is there some other piece of that we don't see? And I think it's interesting just even in markets with not much population growth, you're pushing pretty hard on unit growth.

Speaker #6: Is that a function of you think because the industry is under stress, this is the time when you should really be taking market share and trying to secure new sites to because you think share opportunities are greater today?

Chris Kempczinski: The early benefits from these new capabilities give us a clear line of sight into how they'll unlock growth and productivity moving forward. Loyalty is another great example. In November 2020, the McDonald's Loyalty app was just beginning to launch in the US. In 2023, we had about $20 billion in system-wide sales to loyalty members across 50 markets. In 2025, we almost doubled those sales, with nearly 210 million 90-day active users across 70 markets. We're on track to reach our target of 250 million 90-day active users by the end of 2027. This matters because we know that loyalty increases visit frequency and opens the door to new ways to engage with our fans, like multi-visit bonus games such as the Snack Crafts campaign in the US or exclusive partnerships available only through the app.

Speaker #6: Is that the main

Speaker #6: driver? Yeah.

Speaker #2: Hi, Brian. And let me take that one. Well, I'd start just kind of going back to what we outlined in our December '23 investor day event.

Speaker #2: And we said there, we expected our capital budget to go up basically three to 500 million every year consistently as we got to our run rate of 1,000 gross openings in our wholly-owned markets in 2027.

Chris Kempczinski: We're on track to reach our target of 250 million 90-day active users by the end of 2027. This matters because we know that loyalty increases visit frequency and opens the door to new ways to engage with our fans, like multi-visit bonus games such as the Snack Crafts campaign in the US or exclusive partnerships available only through the app.

Speaker #2: And we basically have been fully on track to that every year. We were slightly above that range in 2025 at $3.4 billion of capital for the year.

Speaker #2: But that was driven by two things: some kind of FX headwinds from a weaker U.S. dollar and us being a little bit ahead of our future opening pipeline.

Speaker #2: So more spend related to 2026 and '27 opening. So it was a healthy, let's call it, adjustment, as you would have seen in our expect the capital to go up another guidance.

Chris Kempczinski: Another critical proof is the connection between the app and the deployment of Ready on Arrival in our top six markets. It's already driving faster service, reducing wait times, and improving customer satisfaction. We expect those benefits to compound as adoption grows across the system. These touchpoints simply didn't exist a few years ago. When we execute, we know we can outperform the competition in any environment. What's clear is that we've earned the right to look forward. We're excited to share what's next with our system at our worldwide convention in Las Vegas in June, and we expect to share more details with all of you during an investor update sometime this fall. Stay tuned.

Speaker #2: Again, in ’26, we’re in that $300 to $500 million range. So again, consistently in that range. We did, as we've talked about before, a lot of work before we kind of committed to where we thought we wanted to be—at 50,000 units by the end of ’27, in ’23—to really get deep on where we felt the gaps in trading areas were, where we felt the opportunities were.

Chris Kempczinski: When we execute, we know we can outperform the competition in any environment. What's clear is that we've earned the right to look forward. We're excited to share what's next with our system at our worldwide convention in Las Vegas in June, and we expect to share more details with all of you during an investor update sometime this fall. Stay tuned.

Speaker #2: And as you know, we’ve used the U.S. as an example before, which is one of our more mature, fairly penetrated markets, but a market where we hadn’t grown net units since 2014.

Speaker #2: I think until basically '22, '23, a market where there's been a lot of popular population migration over time, where our openings have not kept up.

Chris Kempczinski: Before we turn to your questions, I want to again thank our franchisees, suppliers, restaurant teams, and everyone across the McDonald's system for the commitment, the partnership, and the passion that you bring to this business. Your dedication is the driving force behind our achievements and what enables us to pursue this next chapter with confidence as we transform our long-term ambitions into tangible results. With the new year well underway, we'll continue to lead, innovate, and deliver for our customers, our people, and our shareholders. Together, we will make 2026 a year that defines the future of McDonald's. With that, we'll take your questions.

Speaker #2: And so I think the ultimate measure is, are we getting the first year sales in those new sites? Are we getting the returns that we expect?

Speaker #2: And the answer to both of those questions is yes, and that is confirmatory to the fact that we're getting the right sites in the right places and building the brand in a very healthy way.

Speaker #2: way. Next

Chris Kempczinski: With the new year well underway, we'll continue to lead, innovate, and deliver for our customers, our people, and our shareholders. Together, we will make 2026 a year that defines the future of McDonald's. With that, we'll take your questions.

Speaker #3: question is from Dave Palmer at

Speaker #3: Evercore. Yeah.

Speaker #5: Thanks. Good afternoon. I'm just trying to think about how I want to ask this question about what feels like picking up in momentum, but also picking up in your pipeline of ideas that you have going at the same time.

Operator: Thank you. And as a reminder, if you are an investor and would like to ask a question, please press star followed by the number one on your telephone keypad. We ask that you limit yourself to one question and re-queue for any additional questions.

Speaker #5: If beverages is one example where you've tested something, you're coming out in your confident that you have it, and it will work. It sounds like you're testing stuff with chicken.

Speaker #5: It sounds like maybe earlier days there. I'm not sure there. Even on value, feels like that's something where you're continuing to refine as you're getting momentum.

[Analyst]: Our first question today is from Dennis Geiger at UBS.

Dennis Geiger: Thanks. Good afternoon, guys. Appreciate the insights. And Jill, very helpful to get an update from you as well. Chris and Ian, following a strong end to 2025, you both talked about a solid foundation into 2026. Could you talk a bit more on how you're thinking about the US sales trajectory in 2026, given some of those sales drivers you identified, and perhaps how you think about going three for three across value, marketing, and innovation to drive US sales growth this year? Thank you.

Speaker #5: So like a lot of companies, coming out of COVID, there was a little bit of just a disruption during that period and adjustment. And now you're kind of getting your footing in terms of the pipeline.

Speaker #5: So maybe, I don't know, that's an open-ended question if maybe you want to comment on that. And then maybe even stuff that are more foundational beyond just even the tech stack, if you're thinking about things in terms of kitchen and other that might be things that we can think about for the future.

Speaker #5: And thank you.

Chris Kempczinski: Sure. I'll start, and Ian, if you have any additional thoughts. But let's start with value. And as I mentioned in the call, the US put in place a McValue program. That has performed well for us. We added to that the EVM toward the back half of the year. And as we go into 2026, McValue for us is going to continue to be the foundation for our value program. It's going to be something that always continues to evolve. Joe has talked about that in the past. And there's real conversations, live conversations going on right now in the system. But I feel really good about where McValue has headed in this year. And then I think also we've seen the power of great marketing.

Speaker #2: Yeah. Thanks for the question. I would say if you think about the company today and frankly, the world that we're operating in, it's just a very we're at a very different starting point.

Speaker #2: And I went through a number of the things that we've done from a company standpoint with accelerating the Arches that I think put us in a very different place today, when you have what will be 250 million consumers—90-day actives—on your loyalty platform.

Chris Kempczinski: It's going to be something that always continues to evolve. Joe has talked about that in the past. And there's real conversations, live conversations going on right now in the system. But I feel really good about where McValue has headed in this year. And then I think also we've seen the power of great marketing.

Speaker #2: That opens up a whole different way of engagement with your customers than what we had when we began that journey back in 2020, when you have the ability to get every market onto a common tech stack.

Speaker #2: Our ability to move with speed and to deploy solutions gets increased by factors of significant numbers. And so, we've been trying to spend some time to just think about, with these new capabilities, how do we actually start to bring those to market in a way that makes a meaningful difference on both the top line, but also on the productivity side?

Chris Kempczinski: We've seen how something like a Minecraft or Monopoly or Grinch, when you have strong value with that, can really be an accelerant for the business. And I'm feeling good about the lineup that the US team has there. And then, of course, we've talked about beverages. Jill also mentioned some of the other things that we're doing with burgers and chicken. And so I think we've got a strong slate of menu news lined up for the year as well. So now it comes down to what I talked about also in the comments, which is, it looks great on paper. We've just got to go execute. But I think Joe and the team are working well with the franchisees. I know there's a lot of energy and excitement around this. And so I'm confident we're going to go out and execute with excellence.

Speaker #2: And I think at the same point, if you go back to where we were in 2020 or even 2023, nobody was talking really about AI.

Chris Kempczinski: And so I think we've got a strong slate of menu news lined up for the year as well. So now it comes down to what I talked about also in the comments, which is, it looks great on paper. We've just got to go execute. But I think Joe and the team are working well with the franchisees. I know there's a lot of energy and excitement around this. And so I'm confident we're going to go out and execute with excellence.

Speaker #2: Certainly, we weren't talking a whole lot about AI. There was not some of the commentary and thoughts around what does GLP-1 do in the industry?

Speaker #2: What are the impacts of that? We're certainly leaning into all of those things and thinking about all those things and making sure that we're ahead of the curve, that we're seeing around corners and keeping So what Jill is laying out, we're testing a ton of ideas.

[Analyst]: And maybe, Dennis, just a couple of small builds to what Chris teed up. I mean, I think value and affordabilities, we've talked about pretty consistently, are the greens fees. I mean, you've got to have it. It's core to our DNA as a business and brand, and it's certainly core to what consumers are expecting. And I think we would say we've done a pretty good job of kind of strengthening our value and affordability with the things that Chris talked about us putting in place. And that is certainly what we believe is one of kind of the underpinnings to the momentum that we're seeing in our US business.

Ian Borden: And maybe, Dennis, just a couple of small builds to what Chris teed up. I mean, I think value and affordabilities, we've talked about pretty consistently, are the greens fees. I mean, you've got to have it. It's core to our DNA as a business and brand, and it's certainly core to what consumers are expecting. And I think we would say we've done a pretty good job of kind of strengthening our value and affordability with the things that Chris talked about us putting in place. And that is certainly what we believe is one of kind of the underpinnings to the momentum that we're seeing in our US business.

Speaker #2: And I would say also in the restaurants that we've got, they're different in each restaurant. It's not the same thing in each restaurant. And we're excited about sharing more of what we're learning with our system, which we'll do in Las Vegas.

Speaker #2: And then you'll hear more from us as I mentioned in the fall where we bring to light what we think is what's next for

Speaker #2: McDonald's. Just perhaps to build on

[Analyst]: We talked about the fact that in Q4, the US had positive guest count growth, which is always a really strong indication that you're kind of getting to that sustainable top-line growth that is going to drive both sales and more volume into the restaurants. And I think, just maybe, something to note that I think is another important proof point is our US business had its strongest comp guest count gap to the near-in-competitive set in Q4 in recent history. So I think those are all signs of encouragement to us. The key, though, is you've got to get the three for three. It's not just about value and affordability, or about menu, or about marketing individually. It's how you bring those together and leverage them to kind of get that holistic output that you saw us, I believe, deliver in Q4.

Ian Borden: We talked about the fact that in Q4, the US had positive guest count growth, which is always a really strong indication that you're kind of getting to that sustainable top-line growth that is going to drive both sales and more volume into the restaurants. And I think, just maybe, something to note that I think is another important proof point is our US business had its strongest comp guest count gap to the near-in-competitive set in Q4 in recent history.

Speaker #6: That, we've introduced, as I said upfront, the new category management structure, which we're pleased with the progress that we've made in the first nine months.

Speaker #6: That really is helping to focus the organization. We're bringing together operations, supply chain, menu, and marketing around the table together to work in concert, to move at greater pace.

Speaker #6: And we can certainly see the consumers are reacting well to new news, as evidenced by the beverage tech that we ran earlier in 2025 in the U.S.

Ian Borden: So I think those are all signs of encouragement to us. The key, though, is you've got to get the three for three. It's not just about value and affordability, or about menu, or about marketing individually. It's how you bring those together and leverage them to kind of get that holistic output that you saw us, I believe, deliver in Q4.

Speaker #6: So we're seeing early benefits from moving with pace. And I think but one part, but an important part has been the introduction of category management.

Speaker #3: Next question is from John Ivanko of JP.

Speaker #7: Hi. Thank you. So it's certainly an admirable goal to have taste and quality as metrics that you want to improve, or at least kind of pursue, for the McDonald's brand.

[Analyst]: Our next question is from Sarah Senatore, Bank of America.

Operator: Our next question is from Sarah Senatore, Bank of America.

Jill McDonald: Oh, thank you. I guess maybe I wanted to sort of dig in a little further on that value. I know you kind of approached it two ways. One was sort of streamlining or systematizing the approach to the meals, kind of that 15% discount to à la carte prices. Then you also pulled some very sharp price points, as you said, the $5 and $8. So as you think about the pricing architecture, I guess which of those do you think was more powerful? Because I'm asking in the context of restaurant-level margins that were sort of flat-ish year-over-year. And so assuming maybe there's some kind of pressure from that on franchisee margins. And maybe just tacking on to that, are any of the technology solutions that Jill mentioned some of the ways to kind of maybe support this sharper value? Thank you.

Sara Senatore: Oh, thank you. I guess maybe I wanted to sort of dig in a little further on that value. I know you kind of approached it two ways. One was sort of streamlining or systematizing the approach to the meals, kind of that 15% discount to à la carte prices. Then you also pulled some very sharp price points, as you said, the $5 and $8. So as you think about the pricing architecture, I guess which of those do you think was more powerful?

Speaker #7: But my question was really what kind of changes that might have to happen within the kitchen itself? Maybe achieve some of these goals, both in the near term and the medium and longer term.

Speaker #7: In other words, is there equipment, technology, layout that may have to really be changed in a fairly significant way to maybe achieve some of the taste and quality goals?

Sara Senatore: Because I'm asking in the context of restaurant-level margins that were sort of flat-ish year-over-year. And so assuming maybe there's some kind of pressure from that on franchisee margins. And maybe just tacking on to that, are any of the technology solutions that Jill mentioned some of the ways to kind of maybe support this sharper value? Thank you.

Speaker #7: question in my travel seeing And I do ask this some stores in France, for example, that had very different equipment and a very different layout than the McDonald's that I'm used to seeing.

Speaker #7: And what I'm really asking is, is there something like and I don't know what to call it, an experience of the future version two that might be part of the plan in the next couple of years?

Chris Kempczinski: Sure. Well, I guess I'd say I don't think it's one or the other. I think what we've seen and certainly what we're trying to execute is the customer absolutely wants predictable value. And having an EVM is, I think, the way historically we have always delivered for that customer, that predictable everyday value. So you need to have that. And certainly pleased with where the system in the US was able to get to on that. As you well know, it's something that has been well established on our international business for years. And so we're in a good shape there as well. But then also, the customer is looking for, in this environment, some price-pointed items that are offering particular value on top of that.

Speaker #2: Thanks for the question, John. One of the benefits of being 115 different countries is we've got innovation going all over the system. And I'd say when we think about moving the needle on taste and quality, we're going in without any kind of preconceived notions.

Speaker #2: We're not going in with any constraints. We're just—the challenge of the team is, how do we continue to make further improvements around taste and quality?

Chris Kempczinski: And certainly pleased with where the system in the US was able to get to on that. As you well know, it's something that has been well established on our international business for years. And so we're in a good shape there as well. But then also, the customer is looking for, in this environment, some price-pointed items that are offering particular value on top of that. I think you've got to be able to have the predictable value, but the customer also needs to be excited around price-pointed items that come in and out of the menu. That's what we executed against.

Speaker #2: Recognizing that the competitive set is raising the bar on that. And so that's some of what Jill and the team are testing as to how that impacts the restaurants.

Speaker #2: We don't have the answer right aware, we're heading into a remodel cycle. EOTF as hard as it is to believe, the EOTF process in the U.S.

Chris Kempczinski: I think you've got to be able to have the predictable value, but the customer also needs to be excited around price-pointed items that come in and out of the menu. That's what we executed against.

Speaker #2: is now almost a decade ago. That we began on that. It was even longer in some of our IOM markets. And so we're in a natural cadence where our system historically does do remodels around every 10 years or so.

[Analyst]: Maybe, Sarah, just to kind of hook on to Chris, because I know you highlighted kind of margin pressure. I think if you kind of go back to what we've talked pretty consistently about what it takes to grow margins, obviously, is strong top-line sales growth. We saw that in Q4. We grew margins in Q4, including in the US, on the back of that. Obviously, if you look back to earlier quarters, we had less top-line growth in the US combined with, obviously, higher levels of inflation. I think the other data point, it's a little bit to what Chris highlighted, which is you got to do both. I mean, at the end of the day, our owner-operator average cash flow in the US was up year over year.

Ian Borden: Maybe, Sarah, just to kind of hook on to Chris, because I know you highlighted kind of margin pressure. I think if you kind of go back to what we've talked pretty consistently about what it takes to grow margins, obviously, is strong top-line sales growth. We saw that in Q4. We grew margins in Q4, including in the US, on the back of that.

Speaker #2: And so let's just make sure as we go into this remodel cycle that we're doing it mindful of how do we continue to come up with ideas that are going to drive the business.

Speaker #2: And we think taste and quality is certainly one of the biggest opportunities for us. Jill, pass it over to you.

Speaker #6: Sure. So Chris has outlined some of the sort of the early thinking on where can we innovate going forward to make sure that our restaurants are set up to grow where we've identified growth opportunities, chicken, there's plenty of growth still in beef as well as the new areas of beverage.

Ian Borden: Obviously, if you look back to earlier quarters, we had less top-line growth in the US combined with, obviously, higher levels of inflation. I think the other data point, it's a little bit to what Chris highlighted, which is you got to do both. I mean, at the end of the day, our owner-operator average cash flow in the US was up year over year.

Speaker #6: But we're also thinking about improving taste and quality around how we renovate today as well. So how do we help the restaurants execute the gold standards that we have today as well?

[Analyst]: And I think as we've talked about historically, the way you get to sustainable profitability and profitability growth is you drive more volume, more customers into restaurants. And I think if we get that three-for-three formula right, as we've done in Q4, I think you've seen that we're clearly capable to do that and do that well. Next question is from Brian Harbour, Morgan Stanley.

Ian Borden: And I think as we've talked about historically, the way you get to sustainable profitability and profitability growth is you drive more volume, more customers into restaurants. And I think if we get that three-for-three formula right, as we've done in Q4, I think you've seen that we're clearly capable to do that and do that well.

Speaker #6: So we're kind of really thinking about this in a couple of different time frames. What we can do today and how do we get ready for the

Speaker #6: future? Next

Speaker #3: question from David Tarantino at

Speaker #3: Baird. Hi.

Operator: Next question is from Brian Harbour, Morgan Stanley.

Speaker #7: Hi. Good afternoon. I had a couple of questions back on the U.S. value strategy, Chris. And I was wondering if you could comment on how franchisees in the U.S.

[Analyst 1]: Yeah, thanks. Good afternoon, guys. I wanted to ask about just the capital budget. I think it's generally run kind of at the higher end of, I think, where you thought it would a couple of years ago. It'll probably end up being up by $1.5 billion versus 2023. Is that exclusively because you want to move faster on constructing new stores, or is there some other piece of that we don't see? And I think it's interesting just even in markets with not much population growth, you're pushing pretty hard on unit growth. Is that a function of you think because the industry is under stress, this is the time when you should really be taking market share and trying to secure new sites because you think the share opportunities are greater today? Is that the main driver?

Brian Harbour: Yeah, thanks. Good afternoon, guys. I wanted to ask about just the capital budget. I think it's generally run kind of at the higher end of, I think, where you thought it would a couple of years ago. It'll probably end up being up by $1.5 billion versus 2023. Is that exclusively because you want to move faster on constructing new stores, or is there some other piece of that we don't see?

Speaker #7: are embracing the strategy and really two parts to that. One, some of the strategies you've had have required McDonald's to support that financially. What's the current sentiment in the system on extending that without McDonald's question, perhaps more importantly, is I think you've rolled out some new brand standards and I was hoping you could comment on what that might mean for the pricing strategy on the core menu going forward.

Brian Harbour: And I think it's interesting just even in markets with not much population growth, you're pushing pretty hard on unit growth. Is that a function of you think because the industry is under stress, this is the time when you should really be taking market share and trying to secure new sites because you think the share opportunities are greater today? Is that the main driver?

Speaker #7: It seems like keeping price points low and price increases at or below inflation is important. So, just wondering if you can provide some insights on how the system's thinking about that equation.

[Analyst]: Yeah. Hi, Brian. It's Ian. Let me take that one. Well, I'd start just kind of going back to what we outlined in our December 2023 Investor Day event. And we said there we expected our capital budget to go up basically $300 to 500 million every year consistently as we got to our run rate of 1,000 gross openings in our wholly owned markets in 2027. And we've basically been fully on track to that every year. We were slightly above that range in 2025 at $3.4 billion of capital for the year. But that was driven by two things, some kind of FX headwinds from a weaker US dollar and us being a little bit ahead of our future opening pipeline, so more spend related to 2026 and 2027 opening. So it was a healthy, let's call it, adjustment, as you would have seen in our guidance.

Ian Borden: Yeah. Hi, Brian. It's Ian. Let me take that one. Well, I'd start just kind of going back to what we outlined in our December 2023 Investor Day event. And we said there we expected our capital budget to go up basically $300 to 500 million every year consistently as we got to our run rate of 1,000 gross openings in our wholly owned markets in 2027.

Speaker #2: Sure. Well, I'd say certainly in my travels and I was just with some operators in Dallas earlier this week that there's good enthusiasm for where the business is at.

Speaker #2: Certainly, finishing the year as they did in the U.S. is great—kind of heading into the new year. And so, when cash flows up, when there's business momentum, all of those things work toward having positive sentiment, particularly in an environment right now where our performance relative to what we see from some others—I think our franchisees are understanding or appreciative of it's not easy out there, and we're certainly pleased with our performance.

Ian Borden: And we've basically been fully on track to that every year. We were slightly above that range in 2025 at $3.4 billion of capital for the year. But that was driven by two things, some kind of FX headwinds from a weaker US dollar and us being a little bit ahead of our future opening pipeline, so more spend related to 2026 and 2027 opening. So it was a healthy, let's call it, adjustment, as you would have seen in our guidance.

Speaker #2: As to how that continues to evolve, you're right. Our support for EVMs rolls off in many cases. It's already rolled off in some places.

[Analyst]: Again, in 2026, we expect the capital to go up another $300 to 500 million. So again, consistently in that range. We did, as we've talked about before, a lot of work before we kind of committed to where we thought we wanted to be at 50,000 units by end of 2027 in 2023 to really get deep on where we felt the gaps in trading areas, where we felt the opportunities were. And as you know, we've used the US as an example before, which is one of our more mature, fairly penetrated markets, but a market where we hadn't grown net units since 2014, I think until basically 2022, 2023, a market where there's been a lot of population migration over time, where our openings have not kept up. And so I think the ultimate measure is, are we getting the first-year sales in those new sites?

Ian Borden: Again, in 2026, we expect the capital to go up another $300 to 500 million. So again, consistently in that range. We did, as we've talked about before, a lot of work before we kind of committed to where we thought we wanted to be at 50,000 units by end of 2027 in 2023 to really get deep on where we felt the gaps in trading areas, where we felt the opportunities were.

Speaker #2: But I think our system generally looks at business results, and I think the numbers are pretty clear that the EVM strategy for us is working.

Speaker #2: And I would expect that anybody who's looking at the data it's a pretty easy conclusion as to what you would do with that. But ultimately, our support as we've talked about a number of times, it's timely, targeted, and temporary.

Ian Borden: And as you know, we've used the US as an example before, which is one of our more mature, fairly penetrated markets, but a market where we hadn't grown net units since 2014, I think until basically 2022, 2023, a market where there's been a lot of population migration over time, where our openings have not kept up. And so I think the ultimate measure is, are we getting the first-year sales in those new sites?

Speaker #2: We don't subsidize pricing on a permanent basis. And so I think with how we've worked together as a system over the last quarter, now heading into two quarters, I think the pathway forward is pretty clear.

Speaker #2: But ultimately, that's going to be up to franchisees on that. And then to your question around brand standards, I mean, just to reiterate, or state the obvious, franchisees set pricing.

[Analyst]: Are we getting the returns that we expect? The answer to both of those questions is yes. That is confirmatory to the fact that we're getting the right sites in the right places and building the brand in a very healthy way. Next question is from David Palmer at Evercore.

Ian Borden: Are we getting the returns that we expect? The answer to both of those questions is yes. That is confirmatory to the fact that we're getting the right sites in the right places and building the brand in a very healthy way.

Speaker #2: But at the end of the day, we are the custodians of the McDonald's brand. That is what we're selling, and one of the things that's core to our brand is our value positioning.

Speaker #2: And so we don't prescribe exactly how the franchisees have to go deliver value, but the franchisees need to protect the brand and part of that brand DNA is our value leadership that we have there.

Ian Borden: Next question is from David Palmer at Evercore.

David Palmer: Yeah. Thanks. Good afternoon. I'm just trying to think about how I want to ask this question about what feels like picking up in momentum, but also a picking up in your pipeline of ideas that you have going at the same time. Beverages is one example where you've tested something, you're coming out, and you're confident that you have it, and it will work. It sounds like you're testing stuff with chicken. It sounds like maybe earlier days there. I'm not sure there. Even on value, feels like that's something where you're continuing to refine as you're getting momentum. So like a lot of companies, coming out of COVID, there was a little bit of just a disruption during that period and adjustment. And now you're kind of getting your footing in terms of the pipeline.

Speaker #2: And so, there’s lots of different ways we provide support to franchisees through RGM—that’s revenue growth management—on different ways to go do it.

Speaker #2: And the expectation is that however franchisees decide to align against it, they're going to continue to live up to what Ray Kroc started the world's great brands that also continued to lead on value.

Speaker #3: Next question from Greg Frankfurt over at Guggenheim.

David Palmer: Even on value, feels like that's something where you're continuing to refine as you're getting momentum. So like a lot of companies, coming out of COVID, there was a little bit of just a disruption during that period and adjustment. And now you're kind of getting your footing in terms of the pipeline.

Speaker #7: Hey, thanks for the question. I guess I had two questions. One, you made a comment about customers increasing the frequency on the loyalty program.

Speaker #7: Do you have a sense for how much of a needle move that is? And then just the second part of that is, I I think you also made a comment about the accelerating the global tech stack and being on an almost where you want to be?

David Palmer: So maybe, I don't know, that's an open-ended question, if maybe you want to comment on that. And then maybe even stuff that are more foundational, beyond just even the tech stack, if you're thinking about things in terms of kitchen and other that might be things that we can think about for the future. And thank you.

Speaker #7: What are the remaining hurdles to getting that done? Thank you.

Speaker #7: you.

Speaker #2: I'll let Ian take both of

Speaker #2: Those, and if he bubs it, I'll jump.

Speaker #3: On a

Speaker #3: confidence. Yeah.

Chris Kempczinski: Yeah. Thanks for the question. I would say if you think about the company today and, frankly, the world that we're operating in, we're at a very different starting point. I went through a number of the things that we've done from a company standpoint with Accelerating the Arches that I think put us in a very different place today. When you have what will be 250 million consumers, 90-day actives on your loyalty platform, that opens up a whole different way of engagement with your customers than what we had when we began that journey back in 2020. When you have the ability to get every market onto a common tech stack, our ability to move with speed and to deploy solutions gets increased by factors of significant numbers.

Speaker #2: Vote of confidence. Teamwork.

Speaker #3: Let me try and take those. So, I think on the loyalty program, I'd go back again to just emphasize that when we laid out at Investor Day in December '23, the loyalty metric of getting to 250 million 90-day active users by the end of '27.

Speaker #3: We said in our upfront remarks we're now at 210 million 90-day active users. Well on our way and confident to get to that '27 goal.

Chris Kempczinski: When you have what will be 250 million consumers, 90-day actives on your loyalty platform, that opens up a whole different way of engagement with your customers than what we had when we began that journey back in 2020. When you have the ability to get every market onto a common tech stack, our ability to move with speed and to deploy solutions gets increased by factors of significant numbers.

Speaker #3: And we have said that active loyalty membership is our single most important digital metric because when we get consumers into our loyalty program, they visit more often.

Speaker #3: And they spend more over time. And they interact with us more frequently. So they get more value in their interaction with us. And we get more value by them interacting with us.

Chris Kempczinski: And so we've been trying to spend some time to just think about, with these new capabilities, how do we actually start to bring those to market in a way that makes a meaningful difference on both the top line, but also on the productivity side? And I think at the same point, if you go back to where we were in 2020 or even 2023, nobody was talking really about AI. Certainly, we weren't talking a whole lot about AI. There was not some of the commentary and thoughts around what does GLP-1 do in the industry? What are the impacts of that? We're certainly leaning into all of those things and thinking about all those things and making sure that we're ahead of the curve, that we're seeing around corners, and keeping this brand positioned at the front.

Speaker #3: And I think we have a lineup of a pipeline of ideas of how we're going to continue to build and add capability that will add further value to our loyalty customers as we look forward.

Speaker #3: To kind of get to your question more specifically, and we gave this data point, I think, a quarter or two ago, if you look at our U.S.

Speaker #3: For example, a customer in the 12 months—an average customer in the 12 months before they joined our loyalty program—visited us 10 and a half times.

Chris Kempczinski: Certainly, we weren't talking a whole lot about AI. There was not some of the commentary and thoughts around what does GLP-1 do in the industry? What are the impacts of that? We're certainly leaning into all of those things and thinking about all those things and making sure that we're ahead of the curve, that we're seeing around corners, and keeping this brand positioned at the front.

Speaker #3: In the 12 months after they became a loyalty member, they visited us 26 times. So we increased their frequency of visit by more than two and a half times.

Speaker #3: And they also spend more with us over time. That's why loyalty is important. And that's why we're excited to continue creating value.

Speaker #3: So the consumers will be compelled to join and compelled to continue to interact with us on a more frequent basis. I think on the tech stack, I think we've been pretty open over time.

Chris Kempczinski: So what Jill is laying out, we're testing a ton of ideas. And I would say also in the restaurants that we've got, they're different in each restaurant. It's not the same thing in each restaurant. And we're excited about sharing more of what we're learning with our system, which we'll do in Las Vegas. And then you'll hear more from us, as I mentioned, in the fall, where we bring to light what we think is what's next for McDonald's.

Speaker #3: I mean, to go from a fragmented decentralized kind of tech organization to common platforms, and you'll remember again in our investor day in '23, we laid out we want to get to three common platforms in our business that are tech-enabled through a common tech backbone, so to speak.

Speaker #3: That's our consumer platform, our restaurant platform, and our company platform. We're making progress against each of those three. We've got a little more work to do, as Chris alluded to, but we feel really confident in where we're at and the pace of what's left to go to kind of get us to that overall outcome.

Jill McDonald: Just perhaps to build on that, we've introduced, as I said, upfront, the new category management structure, which we're pleased with the progress that we've made in the first nine months. That really is helping to focus the organization. We're bringing together operations, supply chain, menu, and marketing around the table together to work in concert to move at greater pace. And we can certainly see consumers are reacting well to new news, as evidenced by the beverage test that we ran earlier in 2025 in the US. So we're seeing early benefits from moving with pace. And I think but one part, but an important part has been the introduction of category management.

Speaker #3: Next question from Andy Barish over at Jefferies.

Speaker #4: Yeah. Good evening, guys. I wanted to go back to the beverage efforts in the U.S. mention COSMICS, that seems to be a shift. And any color you're willing to provide just in terms of the rollout as we look towards the rest of this year.

Jill McDonald: And we can certainly see consumers are reacting well to new news, as evidenced by the beverage test that we ran earlier in 2025 in the US. So we're seeing early benefits from moving with pace. And I think but one part, but an important part has been the introduction of category management.

Speaker #2: Sure. I'll take that question. So we are obviously, we're really excited about the beverage launch in the U.S. later this year. And we are going to do it under the McCafé brand.

[Analyst]: Next question is from John Ivankoe, JP Morgan.

Operator: Next question is from John Ivankoe, JP Morgan.

[Analyst 1]: Hi. Thank you. So it's certainly an admirable goal to have taste and quality as metrics that you want to improve or at least kind of pursue for the McDonald's brand. But my question was really, what kind of changes that might have to happen within the kitchen itself to maybe achieve some of these goals, both in the near term and the medium and longer term? In other words, is there equipment, technology, layout that may have to really be changed in a fairly significant way to maybe achieve some of the taste and quality goals? And I do ask this question in my travel, seeing some stores in France, for example, that had very different equipment and a very different layout than the McDonald's that I'm used to seeing.

John Ivankoe: Hi. Thank you. So it's certainly an admirable goal to have taste and quality as metrics that you want to improve or at least kind of pursue for the McDonald's brand. But my question was really, what kind of changes that might have to happen within the kitchen itself to maybe achieve some of these goals, both in the near term and the medium and longer term?

Speaker #2: So, we obviously learned a lot through the COSMIC test, and those learnings have been applied to how we've decided to set up this new beverage range.

Speaker #2: But we are going to be launching under the McCafé brand. And just to give you a little bit more color, the results we exceed expectations for the entirety of the program.

John Ivankoe: In other words, is there equipment, technology, layout that may have to really be changed in a fairly significant way to maybe achieve some of the taste and quality goals? And I do ask this question in my travel, seeing some stores in France, for example, that had very different equipment and a very different layout than the McDonald's that I'm used to seeing. What I'm really asking is, is there something like, and I don't know what to call it, an Experience of the Future version 2 that might be part of the plan in the next couple of years?

Speaker #2: It did drive incremental occasions. These were mostly stacked dinner and evening. And we also saw higher average checks. So the financials are really playing out well.

Speaker #2: We learned a lot about the recipes. We offered a range of recipes across indulgent coffees, refreshers, energy, and crafted sodas. All did well, particularly the crafted sodas, refreshers, and energy.

[Analyst 1]: What I'm really asking is, is there something like, and I don't know what to call it, an Experience of the Future version 2 that might be part of the plan in the next couple of years?

Speaker #2: And we're going to do what we do best at McDonald's. We are going to offer great-tasting products, great prices, with the speed and convenience that our customers want and expect.

[Analyst]: Thanks for the question, John. One of the benefits of being in 115 different countries is we've got innovation going all over the system. I'd say when we think about moving the needle on taste and quality, we're going in without any kind of preconceived notions. We're not going in with any constraints. We're just the challenge of the team is, how do we continue to make further improvements around taste and quality, recognizing that the competitive set is raising the bar on that? That's some of what Jill and the team are testing as to how that impacts the restaurants. We don't have the answer right now, but I think as you all are aware, we're heading into a remodel cycle. EOTF, as hard as it is to believe, the EOTF process in the US is now almost a decade ago that we began on that.

Chris Kempczinski: Thanks for the question, John. One of the benefits of being in 115 different countries is we've got innovation going all over the system. I'd say when we think about moving the needle on taste and quality, we're going in without any kind of preconceived notions. We're not going in with any constraints. We're just the challenge of the team is, how do we continue to make further improvements around taste and quality, recognizing that the competitive set is raising the bar on that?

Speaker #2: So more to come on that. We're not going to reveal too many more specifics on all the timing, but you can expect to see news in the U.S.

Speaker #2: and outside of the U.S.

Speaker #2: too. Next question, Lauren Silverman at Deutsche

Speaker #3: Bank. Thank

Speaker #1: Thank you very much. Great quarter. Strong acceleration across segments on a two-year basis. As we look to 2026, we still have a lot of dynamics in the consumer environment.

Chris Kempczinski: That's some of what Jill and the team are testing as to how that impacts the restaurants. We don't have the answer right now, but I think as you all are aware, we're heading into a remodel cycle. EOTF, as hard as it is to believe, the EOTF process in the US is now almost a decade ago that we began on that.

Speaker #1: Sounds like you have a really strong playbook. Can you give any color on how we should be thinking about, I guess, Q1, knowing there's some weather there?

Speaker #1: Still have a little bit of the E. coli lap. And then, thoughts on the same-store sales progression as we move through '26? Thank you.

Speaker #1: you. Hey, Lauren.

Speaker #3: Ian, let me take a crack at that. And I'm sure Chris will add on here. Look, I think as we've talked about already, we feel really good about the underlying momentum and kind of the consistency of that across each of the three operating segments.

[Analyst]: It was even longer in some of our IOM markets. So we're in a natural cadence where our system historically does do remodels around every 10 years or so. Let's just make sure as we go into this remodel cycle that we're doing it mindful of, how do we continue to come up with ideas that are going to drive the business? We think taste and quality is certainly one of the biggest opportunities for us. Jill, pass it over to you.

Chris Kempczinski: It was even longer in some of our IOM markets. So we're in a natural cadence where our system historically does do remodels around every 10 years or so. Let's just make sure as we go into this remodel cycle that we're doing it mindful of, how do we continue to come up with ideas that are going to drive the business? We think taste and quality is certainly one of the biggest opportunities for us. Jill, pass it over to you.

Speaker #3: Kind of continue in '26. And obviously, what we're focused on—and we've talked about this a lot—is really going three for three, focusing on the things that are within our control.

Speaker #3: I think we expect probably that the first half will be likely a little stronger than the second half. And that's just largely a reflection of kind of the benefit of the favorable year-over-year comparisons that we're up against.

Jill McDonald: Sure. So Chris has outlined some of the sort of the early thinking on where can we innovate going forward to make sure that our restaurants are set up to grow where we've identified growth opportunities. Chicken, there's plenty of growth still in beef as well as the new areas of beverage. But we're also thinking about improving taste and quality around how we renovate today as well. So how do we help the restaurants execute the gold standards that we have today as well? So we're kind of really thinking about this in a couple of different time frames, what we can do today, and how do we get ready for the future?

Speaker #3: Maybe just to give a little color by segment, I think for the U.S., we had a solid start in January. We had good kind of underlying momentum, as you heard us talk about today, supported by, I think, what we've done with Extra Value Meals.

Jill McDonald: lity around how we renovate today as well. So how do we help the restaurants execute the gold standards that we have today as well? So we're kind of really thinking about this in a couple of different time frames, what we can do today, and how do we get ready for the future?

Speaker #3: Obviously, McValue more broadly. I think we would say we expect Q1 comp sales growth to decelerate sequentially from the 6.8% in Q4 that you saw.

Speaker #3: I think there are two key reasons for that. One is Q4 growth was particularly strong. Obviously, driven by two really strong activations in Monopoly and Grinch.

[Analyst]: Next question is from David Tarantino at Baird.

Operator: Next question is from David Tarantino at Baird.

[Analyst 1]: Hi. Hi. Good afternoon. I had a couple of questions back on the US value strategy, Chris. And I was wondering if you could comment on how franchisees in the US are embracing the strategy. And really, two parts to that. One, some of the strategies you've had have required McDonald's to support that financially. What's the current sentiment in the system on extending that without McDonald's support? And then the second question, perhaps more importantly, is I think you've rolled out some new brand standards. And I was hoping you could comment on what that might mean for the pricing strategy on the core menu going forward. It seems like keeping price points low and price increases, perhaps at or below inflation, is important. So just wondering if you can provide some insights on how the system's thinking about that equation.

David Tarantino: Hi. Hi. Good afternoon. I had a couple of questions back on the US value strategy, Chris. And I was wondering if you could comment on how franchisees in the US are embracing the strategy. And really, two parts to that. One, some of the strategies you've had have required McDonald's to support that financially. What's the current sentiment in the system on extending that without McDonald's support?

Speaker #3: And then as is well known, you've heard from many others, obviously, we had severe weather impacts in the U.S. beginning in late January. That pressured the industry traffic, pressured our traffic, obviously, and caused quite a few restaurants to close or reduce hours for a number of days.

Speaker #3: We estimate that weather impact to be about 100 basis points for the full quarter, just when you look at kind of the drag that we saw in January.

Speaker #3: I think on international, kind of a similar story. I mean, we had a solid start in IOM in January. Again, we believe we've got kind of strong and consistent underlying momentum.

David Tarantino: And then the second question, perhaps more importantly, is I think you've rolled out some new brand standards. And I was hoping you could comment on what that might mean for the pricing strategy on the core menu going forward. It seems like keeping price points low and price increases, perhaps at or below inflation, is important. So just wondering if you can provide some insights on how the system's thinking about that equation.

Speaker #3: But we do expect Q1 to decelerate sequentially from the 5.2% that we had in IOM in Q4. Again, we've got some weather, I would say, impacts in a number of markets in Europe through January.

Speaker #3: That have put a little bit of pressure kind of on the underlying momentum. And then IDL, again, expect a sequential decrease from the 4.5% that we had in Q4.

[Analyst]: Sure. Well, I'd say certainly in my travels, and I was just with some operators in Dallas earlier this week, that there's good enthusiasm for where the business is at. Certainly, finishing the year as they did in the US is great kind of heading into the new year. And so when cash flows up, when there's business momentum, I think all of those things work toward having positive sentiment, particularly in an environment right now where our performance relative to what we see from some others, I think our franchisees are understanding or appreciative of; it's not easy out there, and we're certainly pleased with our performance. As to how that continues to evolve, you're right. Our support for EVMs rolls off. In many cases, it's already rolled off in some places. But I think our system generally looks at business results.

Chris Kempczinski: Sure. Well, I'd say certainly in my travels, and I was just with some operators in Dallas earlier this week, that there's good enthusiasm for where the business is at. Certainly, finishing the year as they did in the US is great kind of heading into the new year.

Speaker #3: Again, we feel pretty good about the underlying momentum. It's really just driven by, I would say, the kind of continued macro pressures in markets like China.

Speaker #3: And parts of Latin America. So I think we're really confident about what's within our control. Really confident about the underlying momentum of the business.

Chris Kempczinski: And so when cash flows up, when there's business momentum, I think all of those things work toward having positive sentiment, particularly in an environment right now where our performance relative to what we see from some others, I think our franchisees are understanding or appreciative of; it's not easy out there, and we're certainly pleased with our performance. As to how that continues to evolve, you're right. Our support for EVMs rolls off. In many cases, it's already rolled off in some places. But I think our system generally looks at business results.

Speaker #3: And certainly feel good about our ability to continue to kind of execute well, even though the environment remains challenging. Next question from John Tower at

Speaker #3: City. Great.

Speaker #4: Thanks for taking the question. Maybe Jill, one for you. I was hoping you went through a lot of the menu ideas coming in 2026 across the globe and in the U.S.

Speaker #4: Specifically in the U.S., though, I was hoping you could drill a little bit more into how you're thinking around the GLP-1 adoption likely picking up this year with orals being available, and how you're thinking through the menu.

[Analyst]: And I think the numbers are pretty clear that the EVM strategy for us is working. And I would expect that anybody who's looking at the data, it's a pretty easy conclusion as to what you would do with that. But ultimately, our support, as we've talked about a number of times, it's timely, targeted, and temporary. We don't subsidize pricing on a permanent basis. And so I think with how we've worked together as a system over the last quarter, now heading into two quarters, I think the pathway forward is pretty clear. But ultimately, that's going to be up to franchisees on that. And then to your question around brand standards, I mean, just to reiterate or state the obvious, franchisees set pricing. But at the end of the day, we are the custodians of the McDonald's brand. That is what we're selling.

Chris Kempczinski: And I think the numbers are pretty clear that the EVM strategy for us is working. And I would expect that anybody who's looking at the data, it's a pretty easy conclusion as to what you would do with that. But ultimately, our support, as we've talked about a number of times, it's timely, targeted, and temporary. We don't subsidize pricing on a permanent basis.

Speaker #4: Operators, across your system, actually asking you how McDonald's is going to potentially address this shift in

Speaker #4: consumption? Sure.

Speaker #3: Well, let me start, and then I'll let Jill fill in. But as I mentioned in my comments earlier, we're certainly spending a lot of time and paying close attention to it.

Speaker #3: I can tell you right now, we've looked pretty hard, and we don't yet see evidence of it really having a material impact on our business.

Chris Kempczinski: And so I think with how we've worked together as a system over the last quarter, now heading into two quarters, I think the pathway forward is pretty clear. But ultimately, that's going to be up to franchisees on that. And then to your question around brand standards, I mean, just to reiterate or state the obvious, franchisees set pricing. But at the end of the day, we are the custodians of the McDonald's brand. That is what we're selling.

Speaker #3: Now, that said, as you noted, a pill form just became available. We know the pill form has had pretty strong adoption in the early weeks.

Speaker #3: Lily will come out with a pill form of their own sometime in probably Q1, Q2. And so certainly, our view is that adoption is going to continue to grow and as adoption grows, we consumers' behavior changes.

[Analyst]: One of the things that's core to our brand is our value positioning. And so we don't prescribe exactly how the franchisees have to go deliver value, but the franchisees need to protect the brand. And part of that brand DNA is our value leadership that we have there. And so there's lots of different ways. We provide support to franchisees through RGM, this revenue growth management, on different ways to go do it. And the expectation is that however franchisees decide to align against it, they're going to continue to live up to what Ray Kroc started with this brand, which was one of the world's great brands that also continued to lead on value. Next question is from Greg Francfort over at Guggenheim.

Chris Kempczinski: One of the things that's core to our brand is our value positioning. And so we don't prescribe exactly how the franchisees have to go deliver value, but the franchisees need to protect the brand. And part of that brand DNA is our value leadership that we have there. And so there's lots of different ways. We provide support to franchisees through RGM, this revenue growth management, on different ways to go do it.

Speaker #3: We know that, in general, they eat fewer calories in the day. But also, what they eat—the mix of that—changes. Fortunately for us, protein is one of the areas that this consumer, the GLP-1 consumer, is still very much interested in.

Speaker #3: And we've got a great protein offering on our menu, so I think that's an area of strength for us. But we're also seeing changes around maybe less snacking, changes in some of the beverages that they drink, less sugary drinks.

Chris Kempczinski: And the expectation is that however franchisees decide to align against it, they're going to continue to live up to what Ray Kroc started with this brand, which was one of the world's great brands that also continued to lead on value.

Speaker #3: And so, all of those things are factoring into some of what we're out there experimenting with and testing. Ultimately, as we learn more about that and get feedback from our customers, those things could make their way onto the menu.

Chris Kempczinski: Next question is from Greg Francfort over at Guggenheim.

[Analyst 1]: Hey, thanks for the question. I guess I had two questions. One, you made a comment about customers increasing their frequency on the loyalty program. Do you have a sense for how much of a needle mover that is? And then just the second part of that is, I think you also made a comment about accelerating the global tech stack and being almost where you want to be. What are the remaining hurdles to getting that done? Thank you.

Greg Francfort: Hey, thanks for the question. I guess I had two questions. One, you made a comment about customers increasing their frequency on the loyalty program. Do you have a sense for how much of a needle mover that is? And then just the second part of that is, I think you also made a comment about accelerating the global tech stack and being almost where you want to be. What are the remaining hurdles to getting that done? Thank you.

Speaker #3: But Jill, I'll let you kind of pick it up from there.

Speaker #1: Sure. We do have a history of staying close to customers and innovating and adapting our menu as required. So we are already pretty protein-forward, fish, chicken, strips, snack wraps, sausage, biscuit.

Speaker #1: We have a number of items on the menu that customers who are on GLP-1 are enjoying. I think we can call out to help customers a little bit more understand what is high protein on our menu because there are a number of options.

[Analyst]: I'll let Ian take both of those. If he flubs it, I'll jump in.

Chris Kempczinski: I'll let Ian take both of those. If he flubs it, I'll jump in.

David Palmer: Vote of confidence.

Ian Borden: Vote of confidence.

[Analyst]: Yeah. Vote of confidence.

Chris Kempczinski: Yeah. Vote of confidence. Teamwork.

Speaker #1: But we're also going to continue to learn, see what's going to interest them. We have a couple of ideas that we are already looking at for the longer term.

[Analyst 1]: Teamwork.

[Analyst]: Greg, let me try and take those. So I think on the loyalty program, I'd go back again to just emphasize that when we laid out in Investor Day December 2023, loyalty membership, you'll remember we laid out a metric of getting to 250 million 90-day active users by end of 2027. We said in our upfront remarks, we're now at 210 million 90-day active users, well on our way and confident to get to that 2027 goal. And we have said that active loyalty membership is our single most important digital metric because when we get consumers into our loyalty program, they visit more often and they spend more over time. And they interact with us more frequently. So they get more value in their interaction with us, and we get more value by them interacting with us.

Ian Borden: Greg, let me try and take those. So I think on the loyalty program, I'd go back again to just emphasize that when we laid out in Investor Day December 2023, loyalty membership, you'll remember we laid out a metric of getting to 250 million 90-day active users by end of 2027. We said in our upfront remarks, we're now at 210 million 90-day active users, well on our way and confident to get to that 2027 goal.

Speaker #1: So we'll be led by the customers and what they want from us. But there's plenty for them to enjoy on our menu currently.

Speaker #3: Our last question today is from Jeff Bernstein over at

Speaker #4: Great. Thank you very Barclays. much. Just trying to get a sense for the barbell strategy. We talked a lot about value. So I was hoping at least in the U.S., you could share some color on the scores you're seeing, the maybe the share of value or mix of sales.

Ian Borden: And we have said that active loyalty membership is our single most important digital metric because when we get consumers into our loyalty program, they visit more often and they spend more over time. And they interact with us more frequently. So they get more value in their interaction with us, and we get more value by them interacting with us.

Speaker #4: Just trying to get a sense for where value sits, and your comfort level there. And on the flip side, obviously, less talk these days about the premium offer positioning.

Speaker #4: But how do we think about the balance? Obviously, franchisees would love to push, as would you, I'm sure, the upper end of that barbell.

[Analyst]: I think we have a lineup of a pipeline of ideas of how we're going to continue to build and add capability that will add further value to our loyalty customers as we look forward. To kind of get to your question more specifically, and we gave this data point, I think, a quarter or two ago, if you look at our US business as an example, an average customer in the 12 months before they joined our loyalty program visited us 10.5 times. In the 12 months after they became a loyalty member, they visited us 26 times. So we increased their frequency of visit by more than 2.5 times. And they also spend more with us over time. That's why loyalty is important.

Ian Borden: I think we have a lineup of a pipeline of ideas of how we're going to continue to build and add capability that will add further value to our loyalty customers as we look forward. To kind of get to your question more specifically, and we gave this data point, I think, a quarter or two ago, if you look at our US business as an example, an average customer in the 12 months before they joined our loyalty program visited us 10.5 times.

Speaker #4: So, what do we have on tack? Or, how do you feel about your ability to push more premium product offerings as we move through 2026 to balance with that value?

Speaker #4: Thank you.

Speaker #3: Sure. Well, we've talked about on prior calls the fact that industry-wide we've seen traffic hold up pretty well with upper-income consumers and traffic has been pressured with lower-income consumers.

Speaker #3: And of course, lower-income consumers are more value and affordability sensitive. We were pleased to see that we gained share with that low-income consumer in December, which was very much one of the criteria that we set around our value program.

Ian Borden: In the 12 months after they became a loyalty member, they visited us 26 times. So we increased their frequency of visit by more than 2.5 times. And they also spend more with us over time. That's why loyalty is important. And that's why we're excited to kind of continue creating value so that consumers will be compelled to join and compelled to continue to interact with us on a more frequent basis. I think on the tech stack, I think we've been pretty open over time.

[Analyst]: And that's why we're excited to kind of continue creating value so that consumers will be compelled to join and compelled to continue to interact with us on a more frequent basis. I think on the tech stack, I think we've been pretty open over time. I mean, to go from a fragmented, decentralized kind of tech organization to common platforms, and you'll remember, again, in our Investor Day in 2023, we laid out we want to get to three common platforms in our business that are tech-enabled through a common tech backbone, so to speak. That's our consumer platform, our restaurant platform, and our company platform. We're making progress against each of those three.

Speaker #3: And so obviously, we've got to continue that. But I think we're in a better position, certainly, with that part of the consumer cohort. And then on the premium side, we're going to have menu innovation.

Speaker #3: That I think is going to continue to appeal to the upper-income consumers. I think some of the beverage items could clearly go in that category.

Ian Borden: I mean, to go from a fragmented, decentralized kind of tech organization to common platforms, and you'll remember, again, in our Investor Day in 2023, we laid out we want to get to three common platforms in our business that are tech-enabled through a common tech backbone, so to speak. That's our consumer platform, our restaurant platform, and our company platform. We're making progress against each of those three. We've got a little more work to do, as Chris alluded to, but we feel really confident in where we're at and the pace of what's left to go to kind of get us to that overall outcome.

Speaker #3: I think some of what we might be able to do in chicken and burgers as well could fit under that. So, we're a business where 90% of the customers are coming into our restaurant in the U.S. at least once a year.

Speaker #3: And we need to make sure that we've got a broad offering that appeals to all of them, and recognizes that they have different needs.

[Analyst]: We've got a little more work to do, as Chris alluded to, but we feel really confident in where we're at and the pace of what's left to go to kind of get us to that overall outcome. Next question is from Andy Barish over at Jefferies.

Speaker #3: So, I feel—I think we've got a good strategy on that. But certainly, the expectation for the balance of 2026 is that that low-income consumer is going to continue to be under pressure.

Ian Borden: Next question is from Andy Barish over at Jefferies.

Speaker #3: And there should be call it mid-single-digit growth available with the upper-income consumer. And so how do we make sure we're winning with both of them?

Lauren Silberman: Yeah. Good evening, guys. Wondering if we go back to the beverage efforts in the US? Kind of interesting that you did not mention CosMc's, that seems to be a shift. Any color you're willing to provide just in terms of the rollout as we look towards the rest of this year.

Andy Barish: Yeah. Good evening, guys. Wondering if we go back to the beverage efforts in the US? Kind of interesting that you did not mention CosMc's, that seems to be a shift. Any color you're willing to provide just in terms of the rollout as we look towards the rest of this year.

Speaker #3: Thanks, everybody, for joining the call. If you want any types of follow-up, please send me an email. We can get something scheduled. Other than that, have a good evening.

Speaker #3: And we'll talk to you

Speaker #3: later. This concludes McDonald's Corporation

Jill McDonald: Sure. I'll take that question. So obviously, we're really excited about the beverage launch in the US later this year. And we are going to do it under the McCafé brand. So we obviously learned a lot through the CosMc's test. And those learnings have been applied to how we've decided to set up this new beverage range. But we are going to be launching under the McCafé brand. And just to give you a little bit more color, the results did exceed expectations for the entirety of the program. It did drive incremental occasions. These were mostly stacked dinner and evening. And we also saw higher average checks. So the financials are really playing out well. We learned a lot about the recipes. We offered a range of recipes across indulgent coffees, refreshers, energy, and crafted sodas. All did well, particularly the crafted sodas, refreshers, and energy.

Jill McDonald: It did drive incremental occasions. These were mostly stacked dinner and evening. And we also saw higher average checks. So the financials are really playing out well. We learned a lot about the recipes. We offered a range of recipes across indulgent coffees, refreshers, energy, and crafted sodas. All did well, particularly the crafted sodas, refreshers, and energy.

Jill McDonald: We're going to do what we do best at McDonald's. We're going to offer great tasting products, great prices with the speed and convenience that our customers want to expect. More to come on that. We're not going to reveal too many more specifics or the timing, but you can expect to see news in the US and outside of the US too.

[Analyst]: Next question is from Lauren Silberman at Deutsche Bank.

Brian Harbour: Next question is from Lauren Silberman at Deutsche Bank.

Lauren Silberman: Thank you very much. Great quarter, strong acceleration across segments on a two-year basis. As we look to 2026, we still have a lot of dynamics in the consumer environment. Sounds like you have a really strong playbook. Can you give any color on how we should be thinking about, I guess, Q1, knowing there's some weather there, still have a little bit of the E. coli lap, and then thoughts on the same-store sales progression as we move through 2026? Thank you.

[Analyst]: Hey, Lauren. Ian, let me take a crack at that, and I'm sure Chris will add on here. Look, I think as we've talked about already, we feel really good about the underlying momentum and kind of the consistency of that across each of the three operating segments. I think we expect that momentum to kind of continue in 2026. And obviously, what we're focused on, and we've talked about a lot, is really going three for three, focusing on the things that are within our control. I think we expect probably that the first half will be likely a little stronger than the second half. And that's just largely a reflection of kind of the benefit of the favorable year-over-year comparisons that we're up against. Maybe just to give a little color by segment, I think for the US, we've had a solid start in January.

Ian Borden: Hey, Lauren. Ian, let me take a crack at that, and I'm sure Chris will add on here. Look, I think as we've talked about already, we feel really good about the underlying momentum and kind of the consistency of that across each of the three operating segments. I think we expect that momentum to kind of continue in 2026. And obviously, what we're focused on, and we've talked about a lot, is really going three for three, focusing on the things that are within our control.

Ian Borden: I think we expect probably that the first half will be likely a little stronger than the second half. And that's just largely a reflection of kind of the benefit of the favorable year-over-year comparisons that we're up against. Maybe just to give a little color by segment, I think for the US, we've had a solid start in January.

[Analyst]: We had good kind of underlying momentum, as you've heard us talk about today, supported by, I think, what we've done with extra value meals, obviously, McValue more broadly. I think we would say we expect Q1 comp sales growth to decelerate sequentially from the 6.8% in Q4 that you saw. I think there are two key reasons for that. One is Q4 growth was particularly strong, obviously driven by two really strong activations in Monopoly and Grinch. Then as is well known, you've heard from many others, obviously, we had severe weather impacts in the US kind of beginning in late January. That pressured the industry traffic, pressured our traffic, obviously, and caused quite a few restaurants to close or reduce hours for a number of days.

Ian Borden: We had good kind of underlying momentum, as you've heard us talk about today, supported by, I think, what we've done with extra value meals, obviously, McValue more broadly. I think we would say we expect Q1 comp sales growth to decelerate sequentially from the 6.8% in Q4 that you saw. I think there are two key reasons for that.

Ian Borden: One is Q4 growth was particularly strong, obviously driven by two really strong activations in Monopoly and Grinch. Then as is well known, you've heard from many others, obviously, we had severe weather impacts in the US kind of beginning in late January. That pressured the industry traffic, pressured our traffic, obviously, and caused quite a few restaurants to close or reduce hours for a number of days.

[Analyst]: We estimate that weather impact to be about 100 basis points for the full quarter, just when you look at kind of the drag that we saw in January. I think on international, kind of a similar story. I mean, we had a solid start in IOM in January. Again, we believe we've got kind of strong and consistent underlying momentum. But we do expect Q1 to decelerate sequentially from the 5.2% that we had in IOM in Q4. Again, we've got some weather, I would say, impacts in a number of markets in Europe through January that have put a little bit of pressure kind of on the underlying momentum. And then IDL, again, expect a sequential decrease from the 4.5% that we had in Q4. Again, we feel pretty good about the underlying momentum.

Ian Borden: We estimate that weather impact to be about 100 basis points for the full quarter, just when you look at kind of the drag that we saw in January. I think on international, kind of a similar story. I mean, we had a solid start in IOM in January. Again, we believe we've got kind of strong and consistent underlying momentum.

Ian Borden: But we do expect Q1 to decelerate sequentially from the 5.2% that we had in IOM in Q4. Again, we've got some weather, I would say, impacts in a number of markets in Europe through January that have put a little bit of pressure kind of on the underlying momentum. And then IDL, again, expect a sequential decrease from the 4.5% that we had in Q4. Again, we feel pretty good about the underlying momentum.

[Analyst]: That's really just driven by, I would say, the kind of continued macro pressures in markets like China and parts of Latin America. So I think we're really confident about what's within our control, really confident about the underlying momentum of the business, and certainly feel good about our ability to continue to kind of execute well, even though the environment remains challenging. Next question is from John Tower over at Citi.

Ian Borden: That's really just driven by, I would say, the kind of continued macro pressures in markets like China and parts of Latin America. So I think we're really confident about what's within our control, really confident about the underlying momentum of the business, and certainly feel good about our ability to continue to kind of execute well, even though the environment remains challenging.

Ian Borden: Next question is from John Tower over at Citi.

[Analyst 2]: Great. Thanks for taking the question. Maybe, Jill, one for you. I was hoping you went through a lot of the menu ideas coming in 2026 across the globe and in the US. Specifically in the US, though, I was hoping you could drill a little bit more into how you're thinking around the GLP-1 adoption, likely picking up this year with orals being available, and how you're thinking through the menu operators across your system actually asking you how McDonald's is going to potentially address this shift in consumption.

John Tower: Great. Thanks for taking the question. Maybe, Jill, one for you. I was hoping you went through a lot of the menu ideas coming in 2026 across the globe and in the US. Specifically in the US, though, I was hoping you could drill a little bit more into how you're thinking around the GLP-1 adoption, likely picking up this year with orals being available, and how you're thinking through the menu operators across your system actually asking you how McDonald's is going to potentially address this shift in consumption.

[Analyst]: Sure. Well, let me start, and then I'll let Jill fill in. But as I mentioned in my comments earlier, we're certainly spending a lot of time and paying close attention to it. I can tell you right now, we've looked pretty hard, and we don't yet see evidence of it really having a material impact on our business. Now, that said, as you noted, a pill form has just become available. We know the pill form has had pretty strong adoption in the early weeks. Lilly will come out with a pill form of their own sometime in probably Q1, Q2. And so certainly, our view is that adoption is going to continue to grow. And as adoption grows, we know that consumers' behavior changes. We know that, in general, they eat fewer calories in the day, but also what they eat, the mix of that changes.

Chris Kempczinski: Sure. Well, let me start, and then I'll let Jill fill in. But as I mentioned in my comments earlier, we're certainly spending a lot of time and paying close attention to it. I can tell you right now, we've looked pretty hard, and we don't yet see evidence of it really having a material impact on our business. Now, that said, as you noted, a pill form has just become available.

Chris Kempczinski: We know the pill form has had pretty strong adoption in the early weeks. Lilly will come out with a pill form of their own sometime in probably Q1, Q2. And so certainly, our view is that adoption is going to continue to grow. And as adoption grows, we know that consumers' behavior changes. We know that, in general, they eat fewer calories in the day, but also what they eat, the mix of that changes.

[Analyst]: Fortunately for us, protein is one of the areas that this consumer, the GLP-1 consumer, is still very much interested in. And we've got a great protein offering on our menu. So I think that's an area of strength for us. But we're also seeing changes around maybe less snacking, changes in some of the beverages that they drink, and less sugary drinks. And so all of those things are factoring into some of what we're out there experimenting with and testing with. And ultimately, as we learn more about that and get feedback from our customers, those things could make their way onto the menu. But Jill, I'll let you kind of pick it up from there.

Chris Kempczinski: Fortunately for us, protein is one of the areas that this consumer, the GLP-1 consumer, is still very much interested in. And we've got a great protein offering on our menu. So I think that's an area of strength for us. But we're also seeing changes around maybe less snacking, changes in some of the beverages that they drink, and less sugary drinks.

Chris Kempczinski: And so all of those things are factoring into some of what we're out there experimenting with and testing with. And ultimately, as we learn more about that and get feedback from our customers, those things could make their way onto the menu. But Jill, I'll let you kind of pick it up from there.

Jill McDonald: Sure. We do have a history of staying close to customers and innovating and adapting our menu as required. So we are already pretty protein-forward. Feta and fish, chicken, strips, snack wraps, sausage, biscuit. We have a number of items on the menu that customers who are on GLP-1 are enjoying. I think we can call out and just help customers a little bit more understand what is high protein on our menu because there are a number of options. But we're also going to continue to learn, see what's going to interest them. We have a couple of ideas that we are already looking at for the longer term. So we'll be led by the customers and what they want from us. But there's plenty for them to enjoy on our menu currently.

Jill McDonald: But we're also going to continue to learn, see what's going to interest them. We have a couple of ideas that we are already looking at for the longer term. So we'll be led by the customers and what they want from us. But there's plenty for them to enjoy on our menu currently.

[Analyst]: Our last question today is from Jeff Bernstein over at Barclays.

Brian Harbour: Our last question today is from Jeff Bernstein over at Barclays.

[Analyst 2]: Great. Thank you very much. Just trying to get a sense for the barbell strategy. We talked a lot about value. So I was hoping, at least in the US, you could share some color on the scores you're seeing, maybe the share of value or mix of sales. Just trying to get a sense for where value sits and your comfort level there. And on the flip side, obviously, a lot less talk these days about the premium offer positioning. But how do we think about the balance there? Obviously, franchisees would love to push, as would you, I'm sure, the upper end of that barbell. So what do we have on tack, or how do you feel about your ability to push more premium product offerings as we move through 2026 to balance with that value? Thank you.

Jeffrey Bernstein: Great. Thank you very much. Just trying to get a sense for the barbell strategy. We talked a lot about value. So I was hoping, at least in the US, you could share some color on the scores you're seeing, maybe the share of value or mix of sales. Just trying to get a sense for where value sits and your comfort level there.

Jeffrey Bernstein: And on the flip side, obviously, a lot less talk these days about the premium offer positioning. But how do we think about the balance there? Obviously, franchisees would love to push, as would you, I'm sure, the upper end of that barbell. So what do we have on tack, or how do you feel about your ability to push more premium product offerings as we move through 2026 to balance with that value? Thank you.

[Analyst]: Sure. Well, we've talked about on prior calls the fact that industry-wide, we've seen traffic hold up pretty well with upper-income consumers, and traffic has been pressured with lower-income consumers. And of course, lower-income consumers are more value and affordability-sensitive. We were pleased to see that we gained share with that low-income consumer in December, which was very much one of the criteria that we set around our value program. And so obviously, we've got to continue that. But I think we're in a better position, certainly, with that part of the consumer cohort. And then on the premium side, we're going to have menu innovation that I think is going to continue to appeal to the upper-income consumers. I think some of the beverage items could clearly go in that category.

Chris Kempczinski: Sure. Well, we've talked about on prior calls the fact that industry-wide, we've seen traffic hold up pretty well with upper-income consumers, and traffic has been pressured with lower-income consumers. And of course, lower-income consumers are more value and affordability-sensitive. We were pleased to see that we gained share with that low-income consumer in December, which was very much one of the criteria that we set around our value program.

Chris Kempczinski: And so obviously, we've got to continue that. But I think we're in a better position, certainly, with that part of the consumer cohort. And then on the premium side, we're going to have menu innovation that I think is going to continue to appeal to the upper-income consumers. I think some of the beverage items could clearly go in that category.

[Analyst]: I think some of what we might be able to do in chicken and burgers as well could fit under that. So we're a business where 90% of the customers are coming into our restaurant in the US at least once a year. And we need to make sure that we've got a broad offering that appeals to all of them and recognizes that they have different needs. So I think we've got a good strategy on that. But certainly, the expectation for the balance of 2026 is that that low-income consumer is going to continue to be under pressure. And there should be, call it, mid-single-digit growth available with the upper-income consumer. And so how do we make sure we're winning with both of them? Thanks, everybody, for joining the call. If you want any types of follow-ups, please send me an email. We can get something scheduled.

Chris Kempczinski: I think some of what we might be able to do in chicken and burgers as well could fit under that. So we're a business where 90% of the customers are coming into our restaurant in the US at least once a year. And we need to make sure that we've got a broad offering that appeals to all of them and recognizes that they have different needs.

Chris Kempczinski: So I think we've got a good strategy on that. But certainly, the expectation for the balance of 2026 is that that low-income consumer is going to continue to be under pressure. And there should be, call it, mid-single-digit growth available with the upper-income consumer. And so how do we make sure we're winning with both of them?

Dexter Congbalay: Thanks, everybody, for joining the call. If you want any types of follow-ups, please send me an email. We can get something scheduled. Other than that, have a good evening, and we'll talk to you later.

[Analyst]: Other than that, have a good evening, and we'll talk to you later.

Operator: This concludes McDonald's Corporation Investor Call. You may now disconnect and have a great day.

Q4 2025 McDonalds Corp Earnings Call

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