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The Story · MCD

McDonald's Last Two and a Half Years: Two Times Admitting 'It Wasn't Strategy, It Was Execution'

The short answer

After three years of near-double-digit comparable sales growth, McDonald's suffered its first-ever simultaneous slump across every segment in 2024 — a self-admitted "value execution" failure plus an E. coli outbreak. It recovered through 2025, then stumbled again in the U.S. in Q2 2026, triggering a leadership change and a new strategy reveal.

The story

Through late 2023: "stronger than ever"

Comparable sales grew +13.8% (2021), +9.6% (2022), and +8.7% (2023) — near-double-digit growth three years running, driven by post-pandemic revenge spending plus inflation-driven pricing. On the Q4 2023 call, the CEO said "our system's resilience and strength shone through even amid macroeconomic pressure." Tone scored 7-8 throughout this period.

Q2 2024: the turn

Low-income consumer pullback spread to the U.S., Australia, Canada, and Germany, compounded by Middle East-war-related boycotts. For the first time ever, every segment — U.S., international-operated, and international-licensed — declined simultaneously. Crucially, the CEO didn't blame external factors alone: "there were factors within our control, particularly our value execution" — a self-critical admission, not a deflection. Tone score fell to 3, the lowest of the twelve quarters reviewed.

Then an outbreak

In October 2024, an E. coli outbreak traced to slivered onions hit; Q4 U.S. comparable sales fell -1.4%, and the CFO directly admitted "2024 results fell short of our expectations." Full-year 2024 comparable sales finished essentially flat, at -0.1%.

Two-track response, and recovery

McDonald's handled the outbreak fast — cutting off the contaminated onion supplier immediately, promising "fully recovered by early Q2 2025," and confirming exactly that on the Q1 2025 call, a promise kept. For the value problem, a new McValue platform launched a $5 meal deal, later evolving into an "everyday affordable price" menu with items under $3. These responses gradually worked: tone climbed steadily through 2025 (6 → 6 → 7 → 7), and full-year 2025 comparable sales rebounded to +3.1%.

Q2 2026: stumbling again, in the U.S.

U.S. comparable sales came in at just +0.8%, below expectations, and the CEO again admitted directly: "this isn't a strategy problem — we didn't execute at the level this quarter required." Management cited store-level execution variance, too many new initiatives launched in a single quarter overloading store operations, and marketing that underperformed. The company simultaneously replaced its U.S. business leader (Skye Anderson named), wound down its nearly six-year-old "Accelerating the Arches" strategy, and announced a new strategy — "McDonald's > NEXT" — to be unveiled at a September Investor Day.

What changed in the filings GLP-1/weight-loss-medication risk appeared explicitly for the first time in the FY2025 10-K (absent FY2021-2024). "Accelerating the Organization" language shifted from a purely positive FY2022 framing ("modernizes the way it works... faster, more innovative and more efficient") to three straight years of actual restructuring charges ($290M FY2023, $221M FY2024, $229M FY2025) — a multi-year cost program, not a one-time event. Russia mentions declined steadily and disappeared entirely by FY2025 (21 → 13 → 4 → 0 mentions), reflecting the 2022 exit being fully resolved and dropped from risk disclosure.
Our take, in one line Across two cycles — 2024 crisis → 2025 recovery, 2026 renewed stumble — McDonald's problem looks less like "strategy" and more like a recurring U.S. store-level execution issue.

Guidance scorecard

Guidance metrics vs. actual, by year
MetricGuidanceActualResult
Operating margin & effective tax rate (2022-2025)Roughly 40-45% margin band; 20-22% tax rateHit almost exactly all 4 yearsMet
Capex (2024, 2025)Various ranges each yearExceeded (overspent) both yearsMore aggressive than guided
FCF conversion rate (2022-2024)">90%," three years running88.8%, 85.7%, 81.1% — missed every year, worst gap nearly 9 points (2024)Missed 3 straight years
FCF conversion rate (2025)Lowered to "mid-to-high 80s%"83.9%Met (after recalibrating)

The standout pattern is the FCF conversion rate's quiet downward recalibration. After missing a ">90%" target three years running, McDonald's lowered the target itself in 2025 rather than chasing the old number again — and then hit the new, more realistic target. Operating margin and tax rate guidance, by contrast, were hit reliably throughout.

Source: 10-K FY2021 p.10 (2022 guidance), FY2022 p.10-11, FY2023 p.11/13, FY2024 p.11/13, FY2025 p.12; FCF conversion calculated from cash flow statement figures.

Timeline

  • Q4 2023Third straight year of near-double-digit comparable sales growth (+8.7%).
  • Q2 2024CEO admits "value execution" failure; first-ever simultaneous decline across every segment.
  • Q3-Q4 2024E. coli outbreak from slivered onions; U.S. comparable sales -1.4% in Q4; CFO admits results "fell short of our expectations."
  • Q1 2025Outbreak recovery confirmed "fully recovered"; McValue platform gains traction.
  • Q4 2025Full-year comparable sales rebound to +3.1%; tone score climbs to 7.
  • Q1 2026Tone score peaks at 8 — "execute our strategy with fidelity and we win"; share gains in most top-10 markets.
  • Q2 2026CEO admits U.S. execution shortfall again; U.S. business leader replaced; "Accelerating the Arches" strategy winds down, "McDonald's > NEXT" strategy announced for September Investor Day.

Our read

Across two full cycles, McDonald's problem looks structural rather than accidental: a recurring U.S. store-level execution issue, not a strategic misstep. Management's habit of admitting its own execution problems rather than blaming external factors is a credible signal, but the same type of problem recurring on a roughly two-year cycle suggests it hasn't been fully solved. Whether the September Investor Day's new strategy breaks that pattern is the next thing to watch.

What we still don't know

  • The specific contents of the "McDonald's > NEXT" strategy to be unveiled at the September Investor Day aren't knowable from this data.
  • Whether new U.S. business leader Skye Anderson can actually fix the store-execution problem has no track record yet.
  • Whether Q2 2026's stumble is a temporary blip or a trend requires Q3 2026 results (due October 2026) to judge.
Built from 10-K filings for FY2021 through FY2025, DEF 14A 2026, and 12 quarters of earnings call transcripts from Q3 FY2023 (Oct 30, 2023) through Q2 FY2026 (Aug 4, 2026). Tone assessments are qualitative. This is a research summary, not investment advice.

Frequently asked questions

Why did McDonald's sales slump in 2024?

McDonald's suffered its first-ever simultaneous slump across every segment in 2024, which management attributed to a self-admitted "value execution" failure, compounded by an E. coli outbreak.

Did McDonald's recover from the 2024 slump?

It recovered through 2025, but then stumbled again in the U.S. in Q2 2026, which triggered a leadership change and a new strategy reveal.

What sources does this analysis draw from?

This piece is built from McDonald's 10-K filings for FY2021 through FY2025, DEF 14A 2026, and 12 quarters of earnings call transcripts from October 2023 to August 2026.