McDonald’s third-quarter EPS climbs 10% and the dividend rises (NYSE: MCD)

Posted by Michael Walen on Nov 4th, 2026

What happened

McDonald's Corporation (NYSE: MCD) reported third-quarter diluted earnings per share of $3.51, up 10% from $3.18 a year earlier. Profit grew faster than revenue, and part of the gain came from sales of restaurants and excess property.

Net income rose 9% to $2.49 billion from $2.28 billion. Currency translation cost $0.01 per share in the quarter, and EPS rose 11% in constant currencies. Over nine months, net income rose 7% to $6.83 billion and diluted EPS rose 8% to $9.61 from $8.92.

In September, the company raised its quarterly cash dividend 4% to $1.93 per share, payable Dec. 15, 2026. The dividend paid during the quarter was $1.86 per share.

Key numbers

Metric	Latest	Change	Source
Q3 diluted EPS	$3.51	from $3.18, +10%	SEC 8-K, Exhibit 99.2
Q3 net income	$2.49 billion	from $2.28 billion, +9%	SEC 8-K, Exhibit 99.2
Q3 operating income	$3.6 billion	from $3.36 billion, +7%	SEC 8-K, Exhibit 99.2
Nine-month diluted EPS	$9.61	from $8.92, +8%	SEC 8-K, Exhibit 99.2
Q3 total company comparable sales	1.5%	from 3.6%, -2.1 percentage points	Calculated from SEC 8-K
Declared quarterly dividend per share	$1.93	+4%	SEC 8-K, Exhibit 99.2

Read more: McDonald's (MCD) company research

Where the profit came from

Operating income rose 7% to $3.6 billion from $3.36 billion. Without restructuring charges of $56 million this year and $39 million last year, it rose 8%. The charges relate to the company's Accelerating the Organization effort.

The filing credits two drivers for the adjusted gain: higher sales-driven franchised margins and higher other operating income. Franchised margins rose 3% to $3.80 billion from $3.70 billion. Other operating income, net, was $139 million, up from $37 million a year earlier.

Gains on sales of restaurant businesses reached $97 million, up from $35 million, as more U.S. restaurants were sold. The company also booked higher gains on sales of excess properties. Earnings from unconsolidated affiliates, mainly in China, rose on improved restaurant performance.

For the nine months, operating margin was 47.6% against 46.5% a year earlier. The filing says the adjusted margin rose to 48.3% from 47.2%, mainly on higher other operating income.

Stock perps: every US stock that trades as a perpetual future, by leverage, live

Sales are growing more slowly

Underlying demand cooled. Total company comparable sales rose 1.5% in the quarter, down from 3.6% a year earlier. U.S. comparable sales fell 0.2% after rising 2.4%. For the nine months, total company comparable sales rose 2.1% against 2.2%.

Revenue rose 1% to $7.16 billion from $7.08 billion. Systemwide sales, which include sales at franchisee-run restaurants, rose 4% in constant currencies and as reported.

Company-owned U.S. restaurants felt the most pressure. Their margin fell 16% to $75 million from $90 million, which the filing ties to ongoing inflationary cost pressures. Franchised restaurants are about 95% of the system and franchised margins are about 90% of restaurant margin dollars. So that weakness touches a small part of restaurant profit.

Why it matters

OptimistFi has argued that McDonald's turns brand scale and franchising into cash that funds dividends and buybacks. The quarter supports that view. Profit grew faster than revenue and payouts to shareholders rose.

The company paid $1.3 billion in dividends in the quarter and $4.0 billion over nine months. It repurchased 1.9 million shares for $519 million in the quarter and 6.2 million shares for $1.8 billion over nine months. It expects 2026 capital expenditures of about $3.7 billion and a free cash flow conversion rate in the low-to-mid 80% range.

The caveat is the quality of the gain. Part of the operating profit growth came from selling restaurants and excess property, not from restaurant sales. Currency also helped the nine-month results by $0.16 per diluted share. Growth in constant currencies was 6%.

What's next

The $1.93 dividend is payable Dec. 15. The next quarterly report will test whether operating margin holds in the company's 2026 guidance range of mid-to-high 40%. A margin that holds without large gains on restaurant sales would strengthen the case. A further slide in U.S. comparable sales would weaken it.

Restructuring charges under Accelerating the Organization are expected to continue until its planned completion during 2027. The company expects about 2,100 net restaurant additions in 2026 and targets 50,000 global units by the end of 2028, from 46,554 restaurants at Sept. 30.