McDonald's has some positive sales momentum.
Can the company drive higher traffic via its focus on lower-priced menu items?
The stock market has been volatile this year, including a swoon in March and April after the Trump administration announced tariffs. However, equities have bounced back, with the S&P 500 (SNPINDEX: ^GSPC) up 16.1% through Dec. 12.
Turning to individual stocks, it's a good time to review how they've done and what to look for in 2026. Turning to ubiquitous fast-food chain McDonald's (NYSE: MCD), it has been an eventful year.
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It's time to take a look back at how McDonald's did in 2025 and examine the key issues the company's likely to face next year.
Image source: Getty Images.
McDonald's stock price gained 9.3%. When including dividends, the shares produced a total return of 11.1%. That lagged the S&P 500's 17.5%, however.
But the company built some sales growth momentum last year. Management and its restaurants had previously gotten away from the company's traditional value pricing that drew customers, which turned off customers and produced a sustained period of sluggish same-store sales (comps).
In response, management made changes to the menu to place more focus on value pricing. It will also implement changes starting next year that involve working with franchisees and assessing how well they conform to offering lower-priced items.
Changes implemented so far appear to have positively impacted sales. McDonald's comps grew 3.6%, and the company had positive comps in the U.S. and internationally.
Investors should watch some things next year to see if McDonald's can keep the sales momentum going.
First, the broad economy showed signs of weakening. Unemployment ticked up, and inflation remained stubbornly high. Investors should keep an eye on both the U.S. and international economies for signs of weakening, paying particular attention to those two key figures. Any weakness could cause customers to pull back on spending at McDonald's.
Turning to company specifics, McDonald's has seen an influx of higher-income people eating at the chain, while experiencing decreased traffic among those with lower incomes. Can management's focus on a lower-priced menu get this core demographic to eat out more at McDonald's restaurants?
Another major issue will be the customer's reception to management's focus on low menu prices. In connection with this, management will have discussions with franchisees. This is key, since about 95% of its roughly 44,600 locations operate under a franchise agreement.
To measure progress, you can check McDonald's comps. Stronger comps, particularly if they're driven by higher traffic, represent a positive sign. Conversely, weak comps and lower traffic might indicate customers don't find value, although there could be other factors.
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Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.