MCDONALDS CORP
For the period ended Mar 31, 2026. Filed May 7, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
MCD$276.52-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0000063908-25-000059
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0000063908-26-000051
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 231 previous paragraphs and 224 current paragraphs.
156 unchanged; 48 reworded; 18 added; 27 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 14 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
First Quarter 2026 Financial Performance
Current report
Global comparable sales increased 3.8%.
Current report
•International Operated Markets increased 3.9%. Nearly all markets reflected positive comparable sales, led by the U.K., Germany and Australia.
Current report
•Consolidated revenues increased 9% (4% in constant currencies).
Current report
•Systemwide sales increased 11% (6% in constant currencies).
Current report
•Consolidated operating income increased 12% (6% in constant currencies). Results reflected pre-tax charges of $47 million and $66 million for the current year and prior year, respectively, primarily related to restructuring charges associated with Accelerating the Organization. Excluding these current and prior year charges, consolidated operating income increased 11% (5% in constant currencies).
Current report
•Diluted earnings per share was $2.78, an increase of 7% (2% in constant currencies). Excluding the current year charges described above of $0.05 per share, diluted earnings per share was $2.83, an increase of 6% (1% in constant currencies) when also excluding prior year charges.
Current report
n/m Not meaningful
Current report
During the quarter, the Company paid a quarterly dividend of $1.86 per share, or $1.3 billion. Additionally, the Company repurchased 1.3 million shares of stock for $393 million.
Current report
•Total Franchised revenues and Company-owned and operated sales increased 9% (4% in constant currencies), benefiting from strong sales performance across all segments and the positive impact of foreign currency translation in the International Operated Markets and the International Developmental Licensed Markets.
Current report
n/m Not meaningful
Current report
•Selling, general and administrative expenses increased $77 million or 11% (9% in constant currencies) primarily reflecting higher employee costs, including incentive-based compensation.
Current report
•The change in asset dispositions and other (income) expense, net primarily reflected higher gains on sale of excess properties.
Current report
•Operating income increased $305 million or 12% (6% in constant currencies). Results reflected pre-tax charges of $47 million and $66 million for the three months ended March 31, 2026 and 2025, respectively, primarily related to restructuring charges associated with Accelerating the Organization.
Current report
•Interest expense increased 6% (4% in constant currencies) primarily due to higher average debt balances and the impact of foreign currency translation.
Current report
Income Taxes
Current report
Cash used for investing activities totaled $777 million, a slight increase from the three months ended 2025, reflecting the Company's increased capital expenditures in the current year.
Current report
In addition, the AI tools we are incorporating into certain aspects of our business may not generate the intended efficiencies, may increase our exposure to risks (both known and unknown), and could adversely impact our business results. These risks include potential operational disruptions, data integrity issues, and unintended consequences from algorithmic decision-making. Further, emerging global and U.S. regulations governing AI use – including requirements for responsible use, transparency, bias mitigation, accountability, and explainability – may impose significant compliance obligations and increase reputational risk. Failure to comply with these standards or to effectively manage associated risks, including ethical considerations such as fairness, non-discrimination, and responsible deployment, could result in regulatory penalties, litigation, operational setbacks, or adverse brand perceptions.
Removed paragraphs (27)
Previous report
Third Quarter and Nine Months 2025 Financial Performance
Previous report
Global comparable sales increased 3.6% for the quarter and 2.2% for the nine months.
Previous report
•International Operated Markets comparable sales increased 4.3% for the quarter and 2.6% for the nine months. All markets reflected positive comparable sales for the quarter, led by Germany and Australia. Results for the nine months were driven by positive comparable sales in nearly all markets.
Previous report
•Consolidated revenues increased 3% (1% in constant currencies) for the quarter and 2% (1% in constant currencies) for the nine months.
Previous report
•Systemwide sales increased 8% (6% in constant currencies) for the quarter and 5% (5% in constant currencies) for the nine months.
Previous report
•Consolidated operating income increased 5% (3% in constant currencies) for the quarter and 4% (3% in constant currencies) for the nine months. Excluding current and prior year charges detailed in the Operating Income and Operating Margin section on page 30 of this report, consolidated operating income increased 3% (1% in constant currencies) for the quarter and 3% (2% in constant currencies) for the nine months.
Previous report
•Diluted earnings per share was $3.18 for the quarter, an increase of 2% (flat in constant currencies) and $8.92 for the nine months, an increase of 4% (3% in constant currencies). Excluding current and prior year charges detailed in the Net Income and Diluted Earnings Per Share section on page 24 of this report, diluted earnings per share for the quarter was flat at $3.22 (a decrease of 1% in constant currencies) and $9.08, an increase of 2% (1% in constant currencies) for the nine months.
Previous report
Impact of the War in the Middle East
Previous report
The Company’s Systemwide sales and revenue have continued to be negatively impacted by the war in the Middle East, primarily in the International Developmental Licensed Markets, where the majority of restaurants are under a developmental license or affiliate arrangement. The Company is monitoring the evolving situation, which it expects to continue to have a negative impact on Systemwide sales and revenue until macroeconomic conditions recover. The Company generally does not invest any restaurant capital under a developmental license or affiliate arrangement, and it receives a royalty based on a percent of sales, and generally receives initial fees upon the opening of a new restaurant or grant of a new license.
Previous report
For the nine months, net income increased 3% (2% in constant currencies) to $6,399 million, and diluted earnings per share increased 4% (3% in constant currencies) to $8.92. Foreign currency translation had a positive impact of $0.06 on diluted earnings per share.
Previous report
Results for 2025 included the following:
Previous report
Results for 2024 included the following:
Previous report
•Net pre-tax charges of $52 million, or $0.05 per share, for the quarter and $142 million, or $0.15 per share, for the nine months, primarily consisted of transaction costs and non-cash impairment charges associated with the sale of McDonald's business in South Korea and transaction costs associated with the acquisition of McDonald's business in Israel
Previous report
•Pre-tax charges of $46 million, or $0.05 per share, for the quarter and $146 million, or $0.15 per share, for the nine months, related to restructuring charges associated with Accelerating the Organization
Previous report
During the quarter, the Company paid a dividend of $1.77 per share, or $1,262 million, resulting in total dividends paid for the nine months of $3,792 million. Additionally, during the quarter, the Company repurchased 1.7 million shares of stock for $503 million, resulting in total purchases for the nine months of 4.8 million shares, or $1,456 million.
Previous report
•Total Franchised revenues and Company-owned and operated sales increased 3% (flat in constant currencies) for the quarter and increased 1% (flat in constant currencies) for the nine months. Both periods benefited from positive sales performance in the International Operated Markets. In the U.S., total revenues for the quarter was driven by positive franchised sales performance, while the nine months was driven by negative Company-owned and operated sales performance. International Developmental Licensed Markets & Corporate revenues for both periods were impacted by the prior year sale of McDonald's business in South Korea, partly offset by positive sales performance. International Developmental Licensed Markets & Corporate revenues for the nine months also reflected the prior year acquisition of McDonald's business in Israel.
Previous report
•Selling, general and administrative expenses increased $137 million or 21% (20% in constant currencies) for the quarter and increased $109 million or 5% (5% in constant currencies) for the nine months. Results for the quarter primarily reflected increased spend on marketing initiatives, higher incentive-based compensation and investments in digital and technology, as well as transformation efforts, under our Accelerating the Arches strategy. Results for the nine months primarily reflected higher employee costs, including incentive-based compensation.
Previous report
•Equity in earnings of unconsolidated affiliates for both periods primarily reflected higher equity in earnings in China and Japan as a result of improved operating performance.
Previous report
•The increase in asset dispositions and other (income) expense, net for both periods primarily reflected higher asset write-offs and higher store closing costs.
Previous report
Results for the quarter and nine months ended 2024 reflected net pre-tax charges of $52 million and $142 million, respectively, primarily consisting of transaction costs and non-cash impairment charges associated with the sale of McDonald's business in South Korea and transaction costs associated with the acquisition of McDonald's business in Israel, and pre-tax charges of $46 million and $146 million for the quarter and nine months, respectively, related to restructuring charges associated with Accelerating the Organization.
Previous report
•Operating income increased $168 million, or 5% (3% in constant currencies), for the quarter and increased $393 million, or 4% (3% in constant currencies), for the nine months. Results reflected net pre-tax charges of $39 million and $148 million for the quarter and the nine months, respectively, primarily related to restructuring charges associated with Accelerating the Organization.
Previous report
Results for the quarter and nine months ended 2024 reflected net pre-tax charges of $52 million and $142 million, respectively, primarily related to non-cash impairment charges and transaction costs, and pre-tax restructuring charges of $46 million and $146 million for the quarter and nine months, respectively, related to Accelerating the Organization.
Previous report
OPERATING INCOME & OPERATING MARGIN RECONCILIATION*
Previous report
Dollars in millions
Previous report
•Interest expense increased 7% (5% in constant currencies) for the quarter and 4% (4% in constant currencies) for the nine months. Results for both periods reflected higher average debt balances as well as higher average interest rates.
Previous report
•On July 4, 2025, Public Law Number 119-21 (Bill H.R. 1) was enacted in the U.S. with varying effective dates beginning in 2025. The new legislation extends certain provisions enacted with the Tax Cuts and Jobs Act, while introducing or restoring international and domestic business provisions that impact U.S. corporations. The Company recorded the impacts of the legislation in the third quarter of 2025, which were not material to the Condensed Consolidated Financial Statements.
Previous report
Cash used for investing activities totaled $2.8 billion for the nine months 2025, a decrease of $1.8 billion compared with the nine months 2024. The decrease was primarily due to the Company's acquisition of an increased ownership stake in McDonald's China business in the prior year.
Reworded paragraphs (48)
Previous wording
The Company franchises and owns and operates McDonald's restaurants, which serve a locally relevant menu of quality food and beverages in communities across more than 100 countries. Of the 44,599 McDonald's restaurants at September 30, 2025, approximately 95% were franchised.
Current wording
The Company franchises and owns and operates McDonald’s restaurants, which serve a locally relevant menu of quality food and beverages in communities across more than 100 countries. Of the 45,699 McDonald's restaurants at March 31, 2026, approximately 95% were franchised.
Previous wording
The Company's reporting segments are aligned with its strategic priorities and reflect how management reviews and evaluates operating performance. Significant reportable segments include the United States ("U.S.") and International Operated Markets. In addition, there is the International Developmental Licensed Markets & Corporate, which includes the results of over 75 countries, as well as Corporate activities.
Current wording
The Company’s reporting segments are aligned with its strategic priorities and reflect how management reviews and evaluates operating performance. Significant reportable segments include the United States ("U.S.") and International Operated Markets. In addition, the International Developmental Licensed Markets & Corporate includes the results of over 75 countries as well as Corporate activities.
Previous wording
Directly operating McDonald's restaurants contributes significantly to the Company's ability to act as a credible franchisor. One of the strengths of the franchising model is that the expertise from Company-owned and operated restaurants allows McDonald's to improve the operations and success of all restaurants while innovations from franchisees can be tested and, when viable, efficiently implemented across relevant restaurants. Having Company-owned and operated restaurants provides Company personnel with a venue for restaurant operations training experience. In addition, in our Company-owned and operated restaurants, and in collaboration with franchisees, the Company is able to further develop and refine operating standards, marketing concepts and product and pricing strategies.
Current wording
Directly operating McDonald’s restaurants contributes significantly to the Company's ability to act as a credible franchisor. One of the strengths of the franchising model is that the expertise from Company-owned and operated restaurants allows McDonald’s to improve the operations and success of all restaurants, and allows innovations from franchisees to be tested and, when viable, efficiently implemented across relevant restaurants. Having Company-owned and operated restaurants provides Company personnel with a venue for restaurant operations training experience. In addition, in our Company-owned and operated restaurants, and in collaboration with franchisees, the Company is able to further develop and refine operating standards, marketing concepts and product and pricing strategies.
Previous wording
•Commit to the Core menu by tapping into customer demand for the familiar and focusing on serving our iconic products that are beloved by customers around the world such as our World Famous Fries, Big Mac, Quarter Pounder and Chicken McNuggets, which are some of our seventeen unique billion-dollar brands. Building on its foundational strength with burgers, the Company will continue to evolve and innovate its longest-standing menu item with plans to continue to implement “Best Burger”; a series of operational and formulation changes designed to deliver hotter, juicier, tastier burgers to nearly all markets by the end of 2026. Further, the Company is focused on continuing to gain share in the rapidly growing chicken category, as we continue to aggressively grow our chicken brands. This includes plans to offer the McCrispy sandwich in nearly all major markets by the end of 2025 and to extend the McCrispy brand into strips and wraps in several markets. These planned innovations and new menu offerings reflect the Company's ability to meet evolving customer preferences. The Company also continues to see a significant opportunity with beverages to drive long-term growth.
Current wording
•Commit to the Core menu by tapping into customer demand for the familiar and focusing on serving our iconic products that are beloved by customers around the world such as our World Famous Fries, Big Mac, Quarter Pounder and Chicken McNuggets, which are some of our seventeen unique billion-dollar brands. Building on its foundational strength with burgers, the Company will continue to evolve and innovate its longest-standing menu item with plans to continue to implement “Best Burger”; a series of operational and formulation changes designed to deliver hotter, juicier, tastier burgers to nearly all markets by the end of 2026. Further, the Company is focused on continuing to gain share in the rapidly growing chicken category, as we continue to aggressively grow our chicken brands. This includes offering the McCrispy sandwich, which was deployed in nearly all major markets by the end of 2025 and the extension of the McCrispy brand into strips and wraps in several markets. These innovations and new menu offerings reflect the Company's ability to meet evolving customer preferences. The Company also continues to see a significant opportunity with beverages to drive long-term growth.
Previous wording
◦Digital: The Company's digital experience is transforming how customers order, pay and receive their food. Through digital tools, customers can access personalized offers, participate in a loyalty program, order through our mobile app and receive McDonald's food through the channel of their choice. We are also providing increased convenience to customers through “Ready on Arrival”; a digital enhancement that enables crew to begin assembling a customer's mobile order prior to arrival at the restaurant to expedite service and elevate customer satisfaction. The Company plans to deploy this initiative in its top six markets by the end of 2025. The Company has successful loyalty programs in 60 markets, including its top six markets. McDonald's loyalty customers have proven to be highly engaged, and the Company plans to increase its 90-day active users to 250 million by the end of 2027. Further, the Company plans to grow its annual Systemwide sales to loyalty members to $45.0 billion by the end of 2027.
Current wording
◦Digital: The Company’s digital experience is transforming how customers order, pay and receive their food. Through digital tools, customers can access personalized offers, participate in a loyalty program, order through our mobile app and receive McDonald's food through the channel of their choice. We are also providing increased convenience to customers through “Ready on Arrival”; a digital enhancement that enables crew to begin assembling a customer's mobile order prior to arrival at the restaurant to expedite service and elevate customer satisfaction. The Company successfully deployed this initiative in its top six markets by the end of 2025. The Company has loyalty programs in 70 markets, including nearly all major markets. McDonald's loyalty customers have proven to be highly engaged, and the Company plans to increase its 90-day active users to 250 million by the end of 2027. Further, the Company plans to grow its annual Systemwide sales to loyalty members to $45.0 billion by the end of 2027.
Previous wording
◦Delivery: The Company offers delivery from approximately 40,000 restaurants across approximately 100 markets, representing nearly 90% of McDonald's restaurants. The Company is continuing to build on and enhance the delivery experience for customers, including adding the ability to place a delivery order in our mobile app (a feature that is currently available in five of the Company's top markets). The Company continues to scale this capability and expects to increase the percentage of Systemwide delivery sales originating from our mobile app to 30% by the end of 2027. The Company also has long-term strategic partnerships with delivery providers that continue to benefit the Company, customers and franchisees by optimizing operational efficiencies and creating a seamless customer experience.
Current wording
◦Delivery: The Company offers delivery from over 41,000 restaurants across approximately 100 markets, representing approximately 90% of McDonald's restaurants. The Company is continuing to build on and enhance the delivery experience for customers, including adding the ability to place a delivery order in our mobile app (a feature that is currently available in five of the Company’s top markets). The Company continues to scale this capability and expects to increase the percentage of Systemwide delivery sales originating from our mobile app to 30% by the end of 2027. The Company also has long-term strategic partnerships with delivery providers that continue to benefit the Company, customers and franchisees by optimizing operational efficiencies and creating a seamless customer experience.
Previous wording
◦Drive Thru: The Company has the most drive thru locations worldwide, with nearly 29,000 drive thru locations globally, including over 95% of the over 13,500 locations in the U.S. This channel remains a competitive advantage in meeting customers’ demand for flexibility and choice. McDonald's network currently provides unmatched scale and convenience for customers, while also offering significant growth opportunities, such as adding additional drive thru lanes to increase capacity and improve speed and efficiency. The Company continues to build on its drive thru advantage, as the vast majority of new restaurant openings in the U.S. and International Operated Markets will include a drive thru.
Current wording
◦Drive Thru: The Company has the most drive thru locations worldwide, with over 29,000 drive thru locations globally, including over 95% of the approximately 13,700 locations in the U.S. This channel remains a competitive advantage in meeting customers’ demand for flexibility and choice. McDonald’s network currently provides unmatched scale and convenience for customers, while also offering significant growth opportunities, such as adding additional drive thru lanes to increase capacity and improve speed and efficiency. The Company continues to build on its drive thru advantage, as the vast majority of new restaurant openings in the U.S. and International Operated Markets will include a drive thru.
Previous wording
◦Restaurant Development: The Company will continue to accelerate the pace of restaurant openings to attempt to fully capture the demand being driven through our Strategy in many of our largest markets. In 2025, the Company plans to open about 2,200 new restaurants (gross) across the globe, which will contribute to slightly over 4% new unit growth (net of closures). Further, the Company continues to build on its industry-leading development, by progressing toward the targeted expansion to 50,000 restaurants by the end of 2027, which would make it the fastest period of restaurant unit growth in Company history.
Current wording
◦Restaurant Development: The Company will continue to accelerate the pace of restaurant openings to attempt to fully capture the demand being driven through our Strategy in many of our largest markets. In 2026, the Company plans to open approximately 2,600 new restaurants (gross) across the globe, which will contribute to slightly over 4.5% new unit growth (net of closures). Further, the Company continues to build on its industry-leading development, by progressing toward the targeted expansion to 50,000 restaurants by the end of 2027, which would make it the fastest period of restaurant unit growth in Company history.
Previous wording
•U.S. comparable sales increased 2.4% for the quarter and 0.5% for the nine months. Comparable sales results for both periods were primarily driven by positive check growth.
Current wording
•U.S. increased 3.9%. Comparable sales results were primarily driven by positive check growth.
Previous wording
•International Developmental Licensed Markets comparable sales increased 4.7% for the quarter and 4.6% for the nine months. Positive comparable sales for both periods were led by Japan, with all geographic regions reflecting positive comparable sales.
Current wording
•International Developmental Licensed Markets increased 3.4%. Positive comparable sales were led by Japan, with all geographic regions reflecting comparable sales growth.
Previous wording
In addition to the comparable sales results, the Company had the following financial results for the quarter and nine months:
Current wording
In addition to the comparable sales results, the Company had the following financial results:
Previous wording
•Systemwide sales include sales at all restaurants, whether owned and operated by the Company or by franchisees. Systemwide sales to loyalty members are comprised of all sales to customers who self-identify as a loyalty member when transacting with both Company-owned and operated and franchised restaurants. Systemwide sales to loyalty members are measured across 60 markets with loyalty programs. Systemwide sales to loyalty members represents an aggregation of the prior four quarters of sales to loyalty members active in the last 90 days of the respective quarter. While franchised sales are not recorded as revenues by the Company, management believes the information is important in understanding the Company's financial performance because these sales are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The Company's revenues consist of sales by Company-owned and operated restaurants and fees from franchised restaurants operated by conventional franchisees, developmental licensees and affiliates. Changes in Systemwide sales are primarily driven by comparable sales and net restaurant unit expansion.
Current wording
•Systemwide sales include sales at all restaurants, whether owned and operated by the Company or by franchisees. Systemwide sales to loyalty members are comprised of all sales to customers who self-identify as a loyalty member when transacting with both Company-owned and operated and franchised restaurants. Systemwide sales to loyalty members are measured across 70 markets with loyalty programs. Systemwide sales to loyalty members represents an aggregation of the prior four quarters of sales to loyalty members active in the last 90 days of the respective quarter. While franchised sales are not recorded as revenues by the Company, management believes the information is important in understanding the Company's financial performance because these sales are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The Company's revenues consist of sales by Company-owned and operated restaurants and fees from franchised restaurants operated by conventional franchisees, developmental licensees and affiliates. Changes in Systemwide sales are primarily driven by comparable sales and net restaurant unit expansion.
Previous wording
The impact of foreign currency translation on consolidated operating results for both periods primarily reflected the strengthening of most major currencies against the U.S. Dollar, partly offset by the weakening of the Australian Dollar and Canadian Dollar.
Current wording
The impact of foreign currency translation on consolidated operating results for the quarter primarily reflected the strengthening of most major currencies against the U.S. Dollar, primarily driven by the Euro.
Previous wording
For the quarter, net income increased 1% (flat in constant currencies) to $2,278 million, and diluted earnings per share increased 2% (flat in constant currencies) to $3.18. Foreign currency translation had a positive impact of $0.04 on diluted earnings per share.
Current wording
Net income increased 6% (1% in constant currencies) to $1,983 million, and diluted earnings per share increased 7% (2% in constant currencies) to $2.78. Foreign currency translation had a positive impact of $0.13 on diluted earnings per share.
Previous wording
•Net pre-tax charges of $39 million, or $0.04 per share, for the quarter and $148 million, or $0.16 per share, for the nine months, primarily related to restructuring charges associated with the Company's internal effort to modernize ways of working (Accelerating the Organization)
Current wording
Results includedpre-tax charges of $47 million, or $0.05 per share, for the three months ended March 31, 2026 and $66 million, or $0.07 per share, for the three months ended March 31, 2025, primarily related to restructuring charges associated with the Company's internal effort to modernize ways of working (Accelerating the Organization).
Previous wording
Excluding the above items, operating income growth for both periods was primarily driven by higher sales-driven Franchised margins, partly offset by higher Selling, general, and administrative expenses.
Current wording
Excluding the above items, results reflected higher sales-driven Franchised margins, partly offset by a higher effective tax rate.
Previous wording
The following table presents the percent change in comparable sales for the quarters and nine months ended September 30, 2025 and 2024:
Current wording
The following table presents the percent change in comparable sales for the three months ended March 31, 2026 and 2025:
Previous wording
The following table presents the percent change in Systemwide sales for the quarter and nine months ended September 30, 2025:
Current wording
The following table presents the percent change in Systemwide sales for the three months ended March 31, 2026:
Previous wording
Franchised sales are not recorded as revenues by the Company, but are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The following table presents Franchised sales and the related increases/(decreases) for the quarters and nine months ended September 30, 2025 and 2024:
Current wording
Franchised sales are not recorded as revenues by the Company, but are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The following table presents franchised sales and the related increases/(decreases) for the three months ended March 31, 2026 and 2025:
Previous wording
•Franchised margins in the U.S., International Operated Markets and the International Developmental Licensed Markets & Corporate reflected sales-driven growth for both periods. Franchised margins represented approximately 90% of restaurant margin dollars.
Current wording
•Franchised margins reflected sales-driven growth across all segments and the positive impact of foreign currency translation in the International Operated Markets and the International Developmental Licensed Markets. Franchised margins represented more than 90% of restaurant margin dollars.
Previous wording
•Company-owned and operated margins for both periods reflected the impact of ongoing inflationary cost pressures in the U.S. and the International Operated Markets. The U.S. was impacted by negative sales performance, while the International Operated Markets reflected sales-driven growth.
Current wording
•Company-owned and operated margins in the U.S. primarily reflected the impact of ongoing inflationary cost pressures, partly offset by sales-driven growth. The International Operated Markets primarily reflected sales-driven growth and the positive impact of foreign currency translation, partly offset by the impact of ongoing inflationary cost pressures.
Previous wording
•Total restaurant margins included depreciation and amortization expense of $438 million and $420 million for the quarters ended 2025 and 2024, respectively, and $1.3 billion and $1.2 billion for the nine months ended 2025 and 2024, respectively.
Current wording
•Total restaurant margins included depreciation and amortization expense of $455 million and $413 million for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
•Selling, general and administrative expenses as a percent of Systemwide sales were 2.1% for both the nine months ended September 30, 2025 and 2024, respectively.
Current wording
•Selling, general and administrative expenses as a percent of Systemwide sales were 2.2% for both the three months ended March 31, 2026 and 2025.
Previous wording
•Gains on sales of restaurant businesses increased for both periods primarily due to more sales of restaurants in the International Operated Markets and the U.S.
Current wording
•The increase in gains on sale of restaurant businesses reflected more sales of restaurants in the International Operated Markets.
Previous wording
•Impairment and other charges (gains), net reflected net pre-tax charges of $39 million and $148 million for the quarter and the nine months, respectively, primarily related to restructuring charges associated with Accelerating the Organization.
Current wording
•Impairment and other charges (gains), net reflected pre-tax charges of $47 million and $66 million for the three months ended March 31, 2026 and 2025, respectively, primarily related to restructuring charges associated with Accelerating the Organization.
Previous wording
*Refer to the Impairment and other charges (gains), net line within the Other Operating (Income) Expense, Net section on page 29 for details of the charges in this table.
Current wording
*Refer to the Impairment and other charges (gains), net line within the Other Operating (Income) Expense, Net section above for details of the charges in this table.
Previous wording
•Excluding the current and prior year charges shown in the table above, operating income increased 3% (1% in constant currencies) for the quarter and 3% (2% in constant currencies) for the nine months. Results for the quarter reflected positive operating results, primarily due to higher sales-driven Franchised margins in the International Operated Markets, partly offset by higher Selling, general, and administrative expenses in International Developmental Licensed Markets & Corporate. Results for the nine months reflected positive operating results, primarily due to higher sales-driven Franchised margins across all segments, partly offset by lower sales-driven Company-owned and operating margins and higher Selling, general, and administrative expenses in the U.S.
Current wording
•Excluding the charges for the three months ended March 31, 2026 and 2025 shown in the table above, operating income increased 11% (5% in constant currencies). Results primarily reflected higher sales-driven Franchised margins across all segments.
Previous wording
The increase in non-GAAP operating margin was primarily due to the prior year sale of McDonald's business in South Korea, partly offset by the prior year acquisition of McDonald's business in Israel and higher Selling, general and administrative expenses.
Current wording
The increase in non-GAAP operating margin was primarily due to higher other operating income.
Previous wording
•Interest income for the nine months decreased due to lower average cash balances and lower average interest rates.
Current wording
•Interest income decreased due to lower average interest rates.
Previous wording
•The effective income tax rate was 22.8% and 20.7% for the quarters ended 2025 and 2024, respectively, and 21.4% and 20.5% for the nine months ended 2025 and 2024, respectively. The effective tax rates for the quarter and nine months ended 2024 reflected discrete income tax benefits related to restructuring initiatives and global audit progression.
Current wording
•The effective income tax rate was 22.0% and 19.8% for the three months ended March 31, 2026 and 2025, respectively. The effective tax rate for the three months ended March 31, 2025 reflected income tax benefits related to restructuring initiatives.
Previous wording
Cash provided by operations totaled $7.9 billion and exceeded capital expenditures by $5.6 billion for the nine months 2025. Cash provided by operations slightly increased compared with the nine months 2024, in line with operating results.
Current wording
Cash provided by operations totaled $2.4 billion and exceeded capital expenditures by $1.7 billion. Cash provided by operations was relatively flat compared to the three months ended 2025, as changes in working capital offset improved operating results.
Previous wording
Cash used for financing activities totaled $3.9 billion for the nine months 2025, a decrease of $1.7 billion compared with the nine months 2024. The decrease was primarily due to higher bond issuances and lower treasury stock purchases in the current year.
Current wording
Cash used for financing activities totaled $1.2 billion, a decrease of $318 million compared to the three months ended 2025. The decrease was primarily due to lower bond repayments in the current year.
Previous wording
•The Company expects net restaurant unit expansion will contribute slightly over 2% to 2025 Systemwide sales growth, in constant currencies.
Current wording
•The Company expects net restaurant unit expansion will contribute approximately 2.5% to 2026 Systemwide sales growth, in constant currencies.
Previous wording
•Based on current interest and foreign currency exchange rates, the Company expects interest expense for the full year 2025 to increase about 4% driven primarily by higher average debt balances and higher average interest rates.
Current wording
•Based on current interest and foreign currency exchange rates, the Company expects interest expense for the full year 2026 to increase between 4% and 6% driven primarily by higher average interest rates.
Previous wording
•The Company expects the effective income tax rate for the full year 2025 to be between 21% and 22%. Some volatility may result in a quarterly tax rate outside of the annual range.
Current wording
•The Company expects the effective income tax rate for the full year 2026 to be between 21% and 23%. Some volatility may result in a quarterly tax rate outside of the annual range.
Previous wording
•The Company expects 2025 capital expenditures to be between $3.0 and $3.2 billion, with the majority directed towards new restaurant unit expansion across the U.S. and International Operated Markets. Globally, the Company expects to open approximately 2,200 restaurants. The Company expects to open about 600 restaurants in the U.S. and International Operated Markets, and that developmental licensees and affiliates will contribute capital towards about 1,600 restaurant openings in their respective markets. The Company expects nearly 1,800 net restaurant additions in 2025.
Current wording
•The Company expects 2026 capital expenditures to be between $3.7 and $3.9 billion, with the majority directed towards new restaurant unit expansion across the U.S. and International Operated Markets. Globally, the Company expects to open approximately 2,600 restaurants. The Company expects to open about 750 restaurants in the U.S. and International Operated Markets, and that developmental licensees and affiliates will contribute capital towards more than 1,800 restaurant openings in their respective markets. The Company expects approximately 2,100 net restaurant additions in 2026.
Previous wording
Our business results are subject to a variety of risks, including those that are described below and elsewhere in our filings with the SEC. The risks described below are not the only risks we face. Additional risks not currently known to us or that we currently deem to be immaterial may also significantly adversely affect our business. If any of these risks were to materialize or intensify, our expectations (or the underlying assumptions) may change and our performance may be adversely affected.
Current wording
SEC. The risks described below are not the only risks we face. Additional risks not currently known to us or that we currently deem to be immaterial may also significantly adversely affect our business. If any of these risks were to materialize or intensify, our expectations (or the underlying assumptions) may change and our performance may be adversely affected.
Previous wording
To continue to be successful in the future, we believe we must preserve, enhance and leverage the value and relevance of our brand, including our corporate purpose, mission and values. Brand value is based in part on consumer perceptions, which are affected by a variety of factors, including the nutritional content and preparation of our food, the ingredients we use, the manner in which we source commodities and general business practices across the System, including the people practices at McDonald’s restaurants. Consumer acceptance of our offerings is subject to change for a variety of reasons, and some changes can occur rapidly. For example, nutritional, health, environmental and other scientific studies and conclusions, which continuously evolve and may have contradictory implications, drive popular opinion, litigation and regulation (including initiatives intended to drive consumer behavior) in ways that affect the “informal eating out” (“IEO”) segment or perceptions of our brand, generally or relative to available alternatives. Our business could also be impacted by business incidents or practices, whether actual or perceived, particularly if they receive considerable publicity or result in litigation or governmental investigations or proceedings, as well as by our perceived position or lack of position on environmental, social responsibility, public policy, geopolitical and similar matters. In addition, we cannot ensure that franchisees or business partners will not take actions that adversely affect the value and relevance of our brand. Consumer perceptions may also be affected by adverse commentary from third parties, including through social media or conventional media outlets, regarding the quick-service category of the IEO segment or our brand, culture, operations, suppliers or franchisees. If we are unsuccessful in addressing adverse commentary or perceptions, whether or not accurate, our brand and financial results may suffer.
Current wording
To continue to be successful in the future, we believe we must preserve, enhance and leverage the value and relevance of our brand, including our corporate purpose, mission and values. Brand value is based in part on consumer perceptions, which are affected by a variety of factors, including the nutritional content and preparation of our food, the ingredients we use, the manner in which we source commodities and general business practices across the System, including the people practices at McDonald’s restaurants. Our business could also be impacted by business incidents or practices, whether actual or perceived, particularly if they receive considerable publicity or result in litigation or governmental investigations or proceedings, as well as by our perceived position or lack of position on environmental, social responsibility, public policy, geopolitical and similar matters. In addition, we cannot ensure that franchisees or business partners will not take actions that adversely affect the value and relevance of our brand. Consumer perceptions may also be affected by adverse commentary from third parties, including through social media or conventional media outlets, regarding the quick-service category of the "informal eating out" ("IEO") segment or our brand, culture, operations, suppliers or franchisees. If we are unsuccessful in addressing adverse commentary or perceptions, whether or not accurate, our brand and financial results may suffer.
Previous wording
Our continued success depends on our System’s ability to build upon our historic strengths and competitive advantages. In order to do so, we need to anticipate and respond effectively to continuously shifting consumer demographics and industry trends in food sourcing, food preparation, food offerings, and consumer behavior and preferences, including with respect to the use of digital channels and environmental and social responsibility matters. If we are not able to predict, or quickly and effectively respond to, these changes, or if our competitors are able to do so more effectively, our financial results could be adversely impacted.
Current wording
Our continued success depends on our System’s ability to build upon our historic strengths and competitive advantages. To do so, we need to anticipate and respond effectively to continuously shifting consumer demographics and industry trends in sourcing, food and beverage preparation, menu offerings, and consumer behavior and preferences, including with respect to the use of digital channels, health and wellness trends and environmental and social responsibility matters. If we are not able to predict, or quickly and effectively respond to, these changes, or if our competitors are able to do so more effectively, our financial results could be adversely impacted.
Previous wording
In addition, we cannot ensure that franchisees and other third parties who hold licenses to our intellectual property will not take actions that adversely affect the value of our intellectual property.
Current wording
We cannot ensure that franchisees and other third parties who hold licenses to our intellectual property will not take actions that adversely affect the value of our intellectual property. Moreover, rapid technological developments, including artificial intelligence (AI)-driven tools, may increase our exposure to existing intellectual property risks, including theft or unlicensed use, intellectual property disputes and enforcement challenges.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Our business results are subject to a variety of risks, including those that are described below and elsewhere in our filings with the
Current report — wording carried from elsewhere
Consumer acceptance of our menu offerings is subject to change for a variety of reasons, and some changes can occur rapidly. For example, health, environmental and other scientific studies and practices (such as changes to dietary guidelines or use of weight-loss medications), continuously evolve and may have contradictory implications, drive popular opinion, regulation, and alter consumer behavior in ways that affect the IEO segment or perceptions of our brand, generally or relative to available alternatives.