Can McDonald's Stock Deliver In Its Next Earnings?

McDonald’s (NYSE: MCD) is set to publish its fiscal second-quarter earnings on Wednesday, August 6, 2025, with analysts anticipating adjusted earnings of $3.14 per share and revenue of $6.7 billion. This would indicate a 6% year-over-year growth in earnings and a 3% increase in sales when compared to the previous year’s figures of $2.97 per share and $6.5 billion in revenue. Historically, MCD stock has demonstrated a pattern of underperforming after earnings announcements, declining 53% of the time with a median one-day decrease of 0.6% and a maximum observed drop of 4%.

McDonald’s began 2025 facing a tough quarter, influenced by macroeconomic challenges and weak U.S. traffic. Improvements from value pricing, menu innovations (notably the Minecraft collaboration and McCrispy), and favorable currency exchange rates are expected to drive recovery for the remainder of the year. The company has reaffirmed its full-year goals and anticipates a gradual rebound in Q2 and onward. McDonald’s current market capitalization stands at $217 billion. Revenue over the past twelve months was $26 billion, and the company has operational profitability with $12 billion in operating profits and net income of $8.2 billion. While the outcome will largely hinge on how results align with expectations and consensus, grasping historical trends might aid event-driven traders.

For those trading based on events, historical trends could provide an advantage, whether by getting in ahead of earnings or responding to movements after the announcements. If you seek potential gains with lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and providing returns that have exceeded 91% since its inception.

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Historical Odds of Positive Post-Earnings Return

Here are some insights regarding one-day (1D) post-earnings returns:

• There are 19 earnings data points recorded over the past five years, with 9 positive and 10 negative one-day (1D) returns noted. Thus, positive 1D returns occurred approximately 47% of the time.
• However, this percentage drops to 45% when examining data from the last 3 years instead of the previous 5.
• The median of the 9 positive returns = 2.7%, while the median of the 10 negative returns = -0.6%

Further details for the observed 5-Day (5D) and 21-Day (21D) returns following earnings are outlined along with the statistics in the table below.

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively lower-risk strategy (although not effective if the correlation is weak) is to assess the correlation between short-term and medium-term returns after earnings, identify a pair that demonstrates the highest correlation, and execute the suitable trade. For instance, if 1D and 5D exhibit the highest correlation, a trader can take a “long” position for the next 5 days if the 1D post-earnings return is favorable. Here is some correlation data based on a 5-year and a 3-year (more recent) history. Note that the correlation 1D_5D indicates the correlation between 1D post-earnings returns and subsequent 5D returns.

Is There Any Correlation With Peer Earnings?

At times, the performance of peers can affect the stock reaction following earnings announcements. In fact, the pricing might start before the earnings are reported. Below is some historical data regarding McDonald’s stock’s post-earnings performance compared to the stock performance of peers that reported earnings immediately before McDonald’s. For accurate comparisons, peer stock returns also reflect post-earnings one-day (1D) returns.

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