Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
McDonald's delivered a strong Q1 FY2026 with revenue rising 9.4% YoY to $6.52B and operating income surging 11.5% to $2.95B, reflecting robust franchise-driven margin expansion despite elevated long-term debt of $40.1B.
Revenue
$6.52B
+9.42% YoY
EPS (Diluted)
$2.78
+6.92% YoY
Operating Income
$2.95B
+11.52% YoY
Source: SEC XBRL
Mcdonalds (MCD) reported Q1 FY2026 revenue of $6.52B, up 9.4% year over year. Operating margin was 45.3%, up 0.8 points from 44.5% a year earlier. Operating cash flow was $2.41B, down 0.7% year over year. MCD's fiscal Q1 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 3.38 | 3.35 | Beat +0.9% |
| Mar 2026This filing | 2.83 | 2.77 | Beat +2.2% |
| Dec 2025 | 3.12 | 3.08 | Beat +1.4% |
| Sep 2025 | 3.22 | 3.36 | Miss -4.2% |
Adjusted (non-GAAP) EPS of $2.83 versus the $2.77 analyst consensus — a +2.2% beat for Mar 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $2.78.
Compiled by AI from this SEC filing
Total revenue increased 9.4% YoY to $6.52B in Q1 FY2026 (vs. $5.96B in Q1 FY2025), with the asset-light franchise model continuing to generate high-margin royalty and rent income while limiting direct cost exposure.
Source: 10-Q Income Statement Data
Operating margin improved to 45.3% from 44.5% in the prior-year period, as operating income grew 11.5% to $2.95B — outpacing revenue growth — reflecting operating leverage and disciplined cost management.
Source: 10-Q Income Statement & Key Ratios Data
SG&A expenses rose 11.3% YoY to $759M, slightly outpacing revenue growth of 9.4%, suggesting incremental investment in corporate overhead, technology, or marketing that management will need to monitor for margin sustainability.
Source: 10-Q Income Statement Data
Stockholders' equity improved significantly from -$3.45B to -$1.29B YoY (a 62.8% improvement), indicating that retained earnings and reduced share buybacks ($396M vs. $477M prior year) are helping to gradually reduce the accumulated deficit driven by years of aggressive capital returns.
Source: 10-Q Balance Sheet & Cash Flow Data
Operating cash flow was $2.41B in Q1 FY2026, essentially flat (-0.7% YoY) versus $2.43B, demonstrating the business continues to generate strong and consistent cash flows to service its $40.1B long-term debt load and fund shareholder returns.
Source: 10-Q Cash Flow Statement Data
Compiled by AI from this SEC filing · 1 high, 4 medium, 0 low
McDonald's carries $40.1B in long-term debt as of Q1 FY2026, up 3.2% YoY, against a negative stockholders' equity of -$1.29B. While the franchise model generates strong cash flows, rising interest rates could increase refinancing costs and compress net income, as evidenced by net income growth (6.2%) lagging operating income growth (11.5%).
Source: 10-Q Balance Sheet & Income Statement Data
McDonald's maintains a structurally negative equity position (-$1.29B), a legacy of decades of share buybacks and dividend payments exceeding retained earnings. While improving, this limits financial flexibility and may concern creditors or counterparties evaluating balance sheet health.
Source: 10-Q Balance Sheet Data
SG&A grew 11.3% YoY to $759M, faster than the 9.4% revenue growth rate. If this trend persists, it could erode the operating margin gains achieved through the franchise model, particularly if revenue growth moderates.
Source: 10-Q Income Statement Data
Cash and equivalents fell 5.5% YoY to $1.17B, while current liabilities rose 3.4% to $4.15B. Although the current ratio remains above 1.0 at 1.14x, the declining cash position relative to a large debt load warrants monitoring for near-term liquidity management.
Source: 10-Q Balance Sheet Data
Net income grew only 6.2% YoY to $1.98B despite operating income growing 11.5%, implying that below-the-line items — likely interest expense on the $40.1B debt — are consuming a meaningful portion of operating gains and limiting earnings growth for shareholders.
Source: 10-Q Income Statement Data
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 6.52 $B | 5.96 $B | +9.42% |
Cost of Revenue $M | 676.00 $M | 620.00 $M | +9.03% |
Operating Income $B | 2.95 $B | 2.65 $B | +11.52% |
Net Income $B | 1.98 $B | 1.87 $B | +6.16% |
EPS (Basic) $ | 2.79 $ | 2.61 $ | +6.90% |
EPS (Diluted) $ | 2.78 $ | 2.60 $ | +6.92% |
SG&A Expense $M | 759.00 $M | 682.00 $M | +11.29% |
Answers draw on this SEC filing and the data on this page
McDonald's Q2 FY2026 results featured slowing comparable sales growth and the launch of a new strategic plan, as rising costs and U.S. traffic declines offset international strength.
McDonald's delivered solid FY2025 results with revenue rising 3.7% to $26.9B, operating income up 5.8% to $12.4B, and operating cash flow surging 11.7% to $10.6B, demonstrating the resilience of its heavily franchised business model despite carrying $40.0B in long-term debt.
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