MCD Maintains Strong International Growth Amid Market Headwinds

McDonald’s Corporation (MCD) delivered resilient international comparable sales in Q3 2025, defying broader quick-service restaurant headwinds and consumer spending pressures. The company’s International Operated Markets (IOM) and International Developmental Licensee (IDL) segments both achieved positive growth, with every market in the IOM portfolio contributing to the upside. This performance underscores McDonald’s international segment’s stability relative to industry-wide challenges.

What’s Driving International Growth?

The standout results stem from two core strategies: localized value initiatives and operational discipline. Management highlighted Germany as the star performer, posting its strongest comparable sales in two years while extending a multi-year run of market share expansion. This success reflects consistent value-focused positioning and targeted marketing campaigns that resonated locally.

In Australia, MCD locked in value pricing for a 12-month period starting July 2025, a strategic move designed to offer pricing certainty during macro volatility while maintaining traffic momentum. The Taste of the World campaign in Germany outperformed expectations, demonstrating how menu innovation combined with local market relevance can drive results.

Cost Management as a Hidden Strength

Beyond top-line growth, MCD’s international performance benefited from disciplined cost control. Management cited sourcing efficiencies, standardized operational execution, and targeted cost mitigation as key factors in managing persistent inflation pressures across food and labor. While inflationary pressures remain elevated versus historical norms in select markets, expense growth has remained measured relative to revenue expansion, supporting margin preservation.

MCD Stock Performance: Outperformance vs. Peers

MCD shares have appreciated 8.4% over the past 12 months, outpacing the broader restaurant industry’s 1.7% decline. This contrasts sharply with peer performance: Starbucks Corporation (SBUX) fell 4.9%, Sweetgreen, Inc. (SG) tumbled 75.2%, and Chipotle Mexican Grill, Inc. (CMG) declined 28.7%.

Valuation Metrics: Premium Pricing Justified?

MCD trades at a forward price-to-sales multiple of 7.73x, meaningfully above the industry average of 3.58x. Comparable peers show lower multiples: Starbucks at 2.58x, Sweetgreen at 1.23x, and Chipotle at 4.06x. This valuation premium reflects investor confidence in MCD’s operational consistency and international earnings power.

Earnings Outlook: Steady Growth Expected

Consensus estimates suggest MCD will report 2026 earnings growth of approximately 10% year-over-year. While this trails some peers—Sweetgreen projects 15.5% growth and Chipotle expects 4.8%—it comes with significantly lower execution risk. Starbucks is anticipated to grow earnings by 8.9% in fiscal 2026.

Forward Perspective

Management maintains cautious optimism on international market durability. Despite persistent macroeconomic uncertainty and competitive pressures, McDonald’s ability to execute consistent value strategies and maintain operational discipline positions the international segment as a stabilizing anchor for consolidated performance. As the company builds revenue on a controlled cost foundation, international markets are positioned to provide steady support to overall business performance going forward.