McDonald's Corp. McDonald's (MCD) served up a mixed bag of second-quarter results on Tuesday, with earnings beating Wall Street's expectations but revenue falling just short. Investors seemed to like what they saw, as shares ticked higher after the report.

Comparable Sales: A Miss by McDonald's Standards

The fast-food giant reported adjusted earnings of $3.38 per share, edging past the analyst consensus of $3.32. Revenue climbed 4% year over year (2% in constant currencies) to $7.099 billion, but that was just shy of the Street's $7.128 billion estimate.

Global comparable sales rose 1.3% during the quarter, with U.S. comparable sales up 0.8%. That growth was driven by higher average spending and a favorable product mix, but it was partly offset by lower guest traffic. Chairman and CEO Chris Kempczinski said the company delivered positive comparable sales growth across all segments, but he was quick to acknowledge that performance fell short of expectations. Management was blunt: it was "not satisfied" with the quarter's comparable-sales growth.

The McValue Rollout: A Case of Good Intentions, Poor Execution

So what went wrong? McDonald's pointed to the rollout of its under $3 Everyday Affordable Price (EDAP) menu, which launched under the McValue platform in late April. The idea was to drive customer visits, but inconsistent execution at the restaurant level and lower-than-expected consumer awareness meant the menu didn't deliver the hoped-for boost.

To fund the McValue initiative, McDonald's also trimmed digital offers and dropped its buy-one, add-one-for-$1 promotion. Those moves, the company said, hurt visits from some loyal customers. In fact, McDonald's estimates that these factors accounted for about two-thirds of the traffic shortfall relative to its expectations for the quarter.

What's Next: Digital Flash Offers and a Marketing Pivot

During the earnings call, management acknowledged that restaurant teams were stretched thin by multiple operational initiatives during the quarter, which led to less efficient execution. To fix that, McDonald's plans to launch digital flash offers starting next week, aimed at re-engaging high-frequency customers. The company also intends to shift marketing spending in the second half of 2026 to support value offerings, including Extra Value Meals.

There's some good news on the brand front: McDonald's says its relevance among U.S. Gen Z consumers has increased, and it now holds a significant advantage over its primary competitor in that demographic.

In a leadership shakeup, longtime executive Skye Anderson will become President of McDonald's USA, effective immediately. Anderson, who was most recently the company's chief operating officer for the U.S., will lead efforts to improve execution in its largest market as Joe Erlinger departs.

Market Reaction

McDonald's shares were up 1.66% at $269.63 at the time of publication on Tuesday, according to market data.