McDonald's stock has trailed the market by more than 30 percentage points over the past year. Wednesday's investor day is the company's chance to show its turnaround plan is more than a name.
McDonald's holds an investor day in Chicago this week to flesh out "McDonald's > NEXT," the growth strategy the company first unveiled in June with few specifics attached. The stakes have risen since then: McDonald's U.S. same-store sales grew just 0.8% last quarter and traffic to its restaurants fell, extending a stretch in which the stock has dropped 18% over the past year while the S&P 500 has climbed 16%, pulling McDonald's market value down to roughly $175 billion.
Chief Executive Chris Kempczinski has attributed the weak results to execution shortcomings, such as an inconsistent rollout of value offerings, rather than to any flaw in the underlying strategy, a distinction investors will be listening for the company to actually demonstrate this week. Skye Anderson, who was named president of the U.S. business following the disappointing quarter, is expected to speak alongside Kempczinski.
Four areas are likely to dominate the presentation. On value, only about two-thirds of U.S. franchisees have adopted the chain's "under $3 menu," and Citi analyst Jon Tower expects McDonald's to signal that franchisee compliance with pricing recommendations will now factor into franchise-agreement renewals; Tower cut his price target on the stock to $310 from $345 ahead of the event, citing doubts about franchisee buy-in. On the menu, McDonald's is expected to detail a shift toward hand-breaded chicken, a more labor-intensive method already used by rivals Chick-fil-A, Raising Cane's and Popeyes, alongside an expanded beverage lineup of crafted sodas, refreshers and energy drinks that Chief Financial Officer Ian Borden has flagged as a priority.
On restaurant remodels, the company is expected to detail a new store design unveiled earlier this year to franchisees, a buildout that BMO Capital Markets analyst Andrew Strelzik estimates could push McDonald's own capital spending up $600 million to $900 million over 2027 and 2028. And on costs, Bernstein analyst Danilo Gargiulo expects McDonald's to target general and administrative spending below 2% of systemwide sales, down from its current 2.2% goal, alongside continued refranchising of company-owned restaurants to shift operating costs off its own books.
Taken together, the four pillars describe a company simultaneously raising its own capital spending and cutting its overhead, while asking franchisees to accept less pricing autonomy in exchange for a renovated store and a broader menu. Whether that combination is enough to reverse a traffic decline Kempczinski has so far pinned on execution rather than strategy is the question this week's investor day actually has to answer.