McDonald's Shares Fall 31% From High as Big Mac Inflation Drives Diners Away

Bloomberg··US·Read original
3▲2 ▼1Impact / 5
Summary · why it matters

McDonald's Corp. is fighting to win back cost-conscious diners who believe its menu has become too expensive, with shares down nearly 31% from their February high and on track for their worst annual return since 2002. The burger chain guided for "slightly negative" US sales for the current quarter during an investor day event earlier this week, while sales last quarter rose just 0.8%, their slowest pace in more than a year. An $8.5 billion multiyear plan to improve service and food quality announced this week raised concerns that it would erode profits, sparking a fresh selloff in the company's shares. The Economist's Big Mac Index shows the price of the sandwich in the US has risen by around 23% between 2019 and the end of 2025, and about a third of franchisees did not follow pricing guidance, according to Chief Executive Officer Chris Kempczinski. Rivals are faring better for now: Restaurant Brands International Inc.'s Burger King posted US comparable sales growth of 8.5% in the latest quarter, while Yum! Brands Inc.-owned Taco Bell reported a 7% increase in same-store sales. McDonald's latest initiative, dubbed "Next," looks to reinvigorate sales through technology investments, restaurant upgrades and plans to gain market share in both the chicken and beverage categories.

Impact on assets 3

Consumer Discretionary± Mixed · 3 stocks
McDonald’s Corporation
MCD
▼ NegativeCapitalPricingrelevance

The $8.5B multiyear service/quality plan raised profit-erosion concerns, sparking a fresh selloff and worst annual return since 2002.

Yum! Brands Inc
YUM
▲ PositiveDemandrelevance

Taco Bell reported a 7% increase in same-store sales, outperforming McDonald's.

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