McDonald’s Corporation MCD has pushed its target of reaching 50,000 restaurants globally to 2028 from the end of 2027, citing higher development costs and a pressured consumer environment. The adjustment follows a review of its restaurant pipeline and signals a more measured approach to expansion.
The decision reinforces McDonald’s established focus on investment returns. The company adjusted its opening pace to support appropriate returns on new locations, emphasizing the quality of development alongside the number of openings. It continues to see significant opportunities to expand its footprint despite the revised schedule.
Despite the adjustment, McDonald’s said it remains in the fastest period of restaurant growth in its history. The company remains on track to open approximately 2,600 gross restaurants in 2026. New openings are contributing to growth, with second-quarter systemwide sales increasing 4% year over year in constant currency.
For McDonald’s, moderating expansion could help preserve the financial appeal of new locations as investment costs rise. The longer timeline provides flexibility to pursue growth at a pace consistent with its return objectives. This supports a disciplined approach to development, with new-restaurant performance remaining the key indicator of success.
Key Competitors Taking Different Paths on Unit Growth
Starbucks Corporation SBUX is taking a more selective approach to coffeehouse development as it works to build a stronger store base. Management said every new coffeehouse must “earn its place,” while net new company-operated unit growth in North America may remain modest through fiscal 2027. Starbucks is also gaining greater visibility into underperforming locations that could be closed while rebuilding its U.S. development pipeline and directing near-term resources toward coffeehouse uplifts, where early results are showing transaction gains. International markets are expected to remain a meaningful contributor to unit growth, supporting the company’s fiscal 2026 target of approximately 600-650 net new coffeehouses.
Dutch Bros Inc. BROS continues to pursue a faster unit expansion strategy, supported by strong new-shop productivity and a growing development pipeline. The company opened 48 system shops in the second quarter and has approximately 90% of the pipeline needed to reach 2,029 shops by 2029. Management said new-shop productivity remained strong alongside rising systemwide AUVs, while several newer markets were annualizing above expectations. Company-operated shop contribution margin reached approximately 31% in the second quarter, although higher coffee and occupancy costs are expected to pressure adjusted EBITDA margin in 2026. With at least 185 system shop openings expected this year, Dutch Bros’ approach contrasts with MCD’s more measured expansion pace, highlighting the importance of new-store productivity and disciplined development as restaurant operators balance growth with attractive returns.
MCD’s Price Performance, Valuation & Estimates
Shares of McDonald’s have declined 18.3% over the past year compared with the industry’s fall of 7.5%.
MCD’s One-Year Price Performance
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From a valuation standpoint, MCD trades at a forward price-to-sales (P/S) multiple of 6.22, above the industry’s average of 3.23.
MCD’s P/S Ratio (Forward 12-Month) vs. Industry
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The Zacks Consensus Estimate for MCD’s 2026 earnings per share (EPS) implies a year-over-year rise of 5.5%. The EPS estimates for 2026 have declined in the past 30 days.
EPS Trend of MCD Stock
Image Source: Zacks Investment Research
MCD’s Zacks Rank
MCD stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).