McDonald's Corporation

Thank you for standing by. Hello and welcome to McDonald's first quarter 2026 investor conference call. At the request of McDonald's Corporation, this conference is being recorded. Following today's presentation, there will be a question and answer session for investors. At that time, investors only may ask a question by pressing star 1 on their touchtone phone. I would now like to turn the conference over to Mr. Dexter Combele, Vice President of Investor Relations for McDonald's Corporation. Mr. Combele, you may begin.

Good morning, everyone, and thank you for joining us. With me on the call today are Chairman and Chief Executive Officer Chris Kempchinsky and Chief Financial Officer Ian Borden. As a reminder, the forward-looking statements in our earnings release and 8K filing also apply to our comments on the call today. Both of those documents are available on our website, as are reconciliations of any non-GAAP financial measures mentioned on today's call, along with their corresponding GAAP measures. Following prepared remarks this morning, we will take your questions. Please limit yourself to one question and then re-enter the queue for any additional questions. Today's conference call is being webcast and is also being recorded for replay via our website. And now, I'll turn it over to Chris.

Good morning, everyone, and thank you for joining us. This past quarter, we once again demonstrated that when we execute our strategy with discipline, we win. In Q1, we grew global system-wide sales 6% in constant currency, and global comparable sales grew 3.8% with solid growth across each of our operating segments. Just as importantly, we gained market share in the quarter in nearly all of our top 10 markets. In a challenging environment, our system stayed focused on what we can control. delivering on the things that matter most to our customers, compelling value that brings customers in the door, breakthrough marketing that gives people a reason to choose McDonald's, and great tasting menu innovation that keeps us relevant and gives customers more of what they want. That's what going three for three looks like at McDonald's, and we believe that outstanding execution will continue to set us apart in any environment. While each pillar is powerful on its own, and even more so together, it all starts with value. At McDonald's, value has always been part of our DNA. As I've said before, and I'll say it again, McDonald's is not going to get beat on value and affordability. We've listened closely to our customers and adjusted along the way with a relentless focus on strengthening our value leadership. In the U.S., With unanimous alignment through the franchisee field votes, we recently evolved McValue to include an everyday affordable price menu with individual items under $3, along with a $4 breakfast meal deal. Those additions build on our meal deal offers throughout the day and give customers clear, consistent options across day parts. We've been applying that same discipline internationally for quite some time, where the vast majority of our large markets offer both everyday affordable price items and meal bundles, giving customers flexibility and options that work for a range of budgets. This approach isn't new to us, and we know it works. We've listened closely to our customers and adjusted along the way. with a relentless focus on strengthening our value leadership and leaning into our role as a bright spot for customers in what continues to be a challenging environment. That's exactly why the U.S. relaunched Extra Value Meals last September. As we said at the outset, we're measuring success in two ways, our ability to grow share with low-income consumers and our ability to improve value and affordability scores. I'm proud to say as we look back from when we launched the program to the first quarter that we've delivered on both, reinforcing something we know well at McDonald's. When value is clear, consistent, and supported by strong marketing and menu execution, it moves the business. That takes us to marketing. Paired with a strong value foundation, marketing remains a powerful growth lever. We saw that this past quarter as teams around the world created moments of joy for fans. and delivered campaigns that resonated with customers across different interests and occasions. Our Friend campaign connected with longtime fans across several international markets by tapping into nostalgia and collectibles. We partnered with the Super Mario Galaxy movie on a Happy Meal tied to the film's release, creating a big family occasion around the brand. And most recently, we launched the K-Pop Demon Hunters partnership with Netflix, a campaign built for a more digitally native customer combining a dual day part offerings with digital activation in the McDonald's app. In the US, even in light of comparing against the highly successful Minecraft movie promotion last year, the K-pop Demon Hunters partnership did what we expected. And as with past culturally relevant IP, like last year's Minecraft and Grinch campaigns, we're scaling the event globally. That's one of McDonald's real advantages. We can take insights that resonate locally, turn them into brand moments customers want to be a part of, and scale them in a way that we believe very few companies can. And when we do that well, marketing does more than create buzz. It drives traffic and strengthens the underlying momentum of the business. Lastly, menu innovation. With our category focus, the system is successfully delivering the great tasting food our customers expect, quickly and efficiently. There's no better example than the beverage category. In Q1, Australia successfully executed a beverage test, building on learnings from last year's U.S. pilot. We're continuing to build real momentum in the category, with both Germany and Canada launching new beverage platforms a few days ago. And yesterday, all U.S. restaurants nationwide began offering three different refreshers and three crafted sodas as part of our new U.S. beverage platform under the McCafe brand. The soft-sell launch results over the last week are encouraging, and we're looking forward to introducing different flavors and Red Bull-infused energy drinks throughout the year. As I said earlier, the strategic combination of a strong value foundation with culturally relevant marketing and focused menu innovation delivers outsized impact. Across key markets, we're seeing consistent three-for-three execution translate into sustained performance. Australia is a clear example of this playbook in action. Value offerings such as McSmart meals and a loose change menu provided compelling flexibility and choice and drove traffic into our restaurants. This quarter's friends activation created excitement for our fans. Beef and chicken full margin LTOs drove comp sales performance in the quarter. And the recent beverage test was met with great customer reception. By going three for three, Australia delivered mid to high single digit comp growth and extended a third consecutive quarter of market share gains. Before I conclude, I want to provide an update on the impact of the war in the Middle East. While the direct impact on our operations in that region did not have a material impact on our total company results in the first quarter, the operating environment remains volatile. Our teams are focused on supporting our franchisees mitigating costs within our control, and protecting the long-term health of the business in the region. We're extremely proud of the way our system continues to consistently show up for customers in every corner of the world, supporting both the communities in which we do business in and our teams, highlighting time and time again the strength of the McDonald's brand when our system comes together. With that, I'll turn it over to Ian.