McDonald’s (MCD) stock traded about 5% higher yesterday despite reporting a 1.4% year-over-year decline in fourth-quarter sales in the U.S., marred by the E. coli outbreak, which impacted sales in about 14 U.S. states. Investor optimism can be attributed to the fast-food giant’s strong international expansion plans, following a 4.1% increase in Q4 international sales.
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At the Q4 earnings call, Chief Financial Officer Ian Borden disclosed plans to open 2,200 new restaurants in 2025, with around 1,000 in China. The rest will be spread across the U.S. and other international markets. This expansion strategy aims to boost future revenue and profits.
Importantly, McDonald’s said it is on track to open over 50,000 restaurants globally by 2027, a significant increase from its about 41,275 locations as of December 2024. This would mark the company’s fastest-ever global expansion move.
MCD’s Strategic Initiatives to Drive Growth
McDonald’s expansion efforts align with its “4Ds” strategy, which focuses on Digital, Delivery, Drive-Thru, and Development. This includes enhancing its digital presence, expanding delivery services, optimizing drive-thru operations, and opening new locations. Further, the company aims to bolster its loyalty program, particularly in the Chinese market, with a target of over 250 million active users.
Moreover, McDonald’s is reintroducing its popular menu items like Snack Wraps and introducing new products to attract more customers. Finally, MCD is implementing a value strategy, such as new meal bundles and promotions. The early success of the $5 meal deal, which has driven average order values above $10, points to the effectiveness of this approach.
McDonald’s expects these initiatives to enhance its global presence and drive revenue growth.
Is MCD a Good Stock to Buy?
Turning to Wall Street, MCD stock has a Moderate Buy consensus rating based on 13 Buys and 11 Holds assigned in the last three months. At $322, the average McDonald’s stock price target implies 4.4% upside potential. Shares of the company have gained 15.82% in the past six months.
