On Aug. 4, McDonald's (NYSE: MCD) reported that U.S. same-store sales growth slowed to just 0.8% as "business slowed significantly" in the second quarter. CEO Chris Kempczinski pinned the shortfall on the company's own execution, and U.S. chief Joe Erlinger was replaced the same day in what the company called a "planned transition." Missed Nvidia in 2009? This Rare Signal Is Flashing Again.
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That's when traffic patterns within the restaurant industry began to change as diners became more value-conscious. At roughly 20.5 times forward earnings, the stock trades below its five-year average, pricing in modest earnings growth from here. So, is this an opportunity now for investors?
McDonald's spent years raising prices to offset inflation. By last fall, Kempczinski acknowledged that lower-income diners had been pulling back for a couple of years. The company responded by relaunching Extra Value Meals, which drove a recovery, with U.S. same-store sales growing 3.9% in the first quarter of 2026.
In April, management expanded the value platform with a new under-$3 menu and a $4 breakfast meal deal. But the rollout gave operators too much leeway, leading a third of franchisees to price items higher than originally intended. To fund the new menu, management also pulled back on digital offers and removed the Buy One, Add One for $1 deal that loyal customers relied on.
Kempczinski called the combination "a bad trade." Traffic fell in the second quarter, even as comps rose 0.8% on higher average checks. Management said U.S. comps were "slightly negative" in July, and the timeline for a fix could run beyond the third quarter. The company also pushed its 50,000-restaurant target back a year, to 2028, citing the consumer backdrop and higher development costs.
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