McDonald’s looks to beef up in US to reinvigorate stock price

Shares of the Big Mac maker have fallen nearly 31% from their February high

Shares in McDonald’s are down nearly 31% from a February high and on track for their worst return since 2002. Picture: AP/Gene J Puskar

McDonald’s faces a key challenge as it fights to reinvigorate a sagging stock price: Winning back the cost-conscious diners who believe its menu has become too expensive.

Shares of the Big Mac maker are 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 for the last quarter rose just 0.8%, their slowest pace in more than a year.

Those signals come alongside long-standing gripes in the US from customers who have complained about everything from menu prices to an in-store exper ience that has suffered from the loss of playgrounds and other popular features.

Recent attempts at value offerings have had mixed results, while an $8.5bn (€7.4bn) multi-year plan to improve service and food quality announced this week raised concerns that it would erode profits, sparking a fresh sell-off in the company’s shares.

“Their prices have gone up substantially, and it’s no longer viewed as the best value in food,” said Jacob Aiken-Phillips, of Melius Research, who has the lone “sell” rating on the stock among analysts tracked by Bloomberg. “I could go to Texas Roadhouse instead and have an actual sit-down experience with my family that’s not that much more expensive.”

A McDonald’s spokesperson reiterated its plans to act with urgency to put the US business in a stronger position exiting 2026.

In 2024, McDonald’s hit back at social media posts criticising rising prices. One widely circulated post showed a Big Mac meal costing $18 (€15.75 — a Big Mac meal in Ireland costs €10.50), which McDonald’s said was from one location in the US out of more than 13,700. That year also saw a boost from $5 meal deals — similar to the Eurosaver menu in Ireland — as the burger chain looked to counter perceptions that its food was too expensive.

Big Mac Index

The Economist’s Big Mac Index, used as a way to compare purchasing power parity between countries, shows the price of the burger in the US rose by around 23% between 2019 and 2025.

McDonald’s began hiking its menu prices in the US after the pandemic to offset surging costs for ingredients such as beef, rising labour wages, and higher fuel.

Meanwhile, customers were also being squeezed by inflation and rising interest rates, making them more selective about where they spend their dollars.

While rising prices have hurt restaurants across the board, rivals of McDonald’s appear to be faring better, at least for the time being. Burger King posted US comparable sales growth of 8.5% in the latest quarter, exceeding estimates thanks to a revamped Whopper and Star Wars promotion. Taco Bell reported a 7% increase in same-store sales. The companies’ shares are up 5% and down 8.4% year-to-date, respectively — underperforming the S&P 500’s gain of 13%. McDonald’s shares, by comparison, are down 23% year-to-date.

Some customers have taken issue with stores they say have lost the magic that made going to McDonald’s a happy childhood memory — especially after the company didn’t reopen many of the playgrounds it shut during the pandemic.

The restaurant’s latest initiative is a response to many of those issues. Dubbed ‘Next’, it looks to reinvigorate sales through technology investments, restaurant upgrades, and plans to gain market share in both the chicken and beverage categories. The company has also unveiled plans to spruce up its PlayPlaces as part of a major restaurant modernisation effort.

Through it all, Wall St has remained mostly positive on the stock. McDonald’s has 24 buy-equivalent ratings, along with 16 holds and just one sell. The average price target implies a 28% return from where shares closed on Friday.

Investors now want to see improved food quality and value, as well as signs of a durable recovery in traffic, said Rebecca Walser, chief investment officer at Walser Wealth Management.

“McDonald’s is part of the American parlance: The Happy Meals, the Hamburglar, Ronald McDonald, the PlayPlaces. They need to re-engineer that experience,” said Ms Walser.

Bloomberg