McDonald's is set to host its investor day in Chicago on Wednesday, where executives are expected to unveil further details of the "McDonald's NEXT" growth strategy designed to win back customers. The presentation comes on the heels of a disappointing second-quarter performance in its U.S. business, which has fueled doubts among investors about the fast-food giant's ability to reconnect with diners in the near term.

Nearly three years have passed since the company's last investor day. The upcoming event follows a quarterly report showing U.S. same-store sales growth of just 0.8%, accompanied by declining foot traffic. Chief Executive Chris Kempczinski has attributed the shortfall to execution issues, such as inconsistent value menu rollouts, rather than a fundamental flaw in the company's strategy.

In response to the weak results, Skye Anderson has been appointed president of McDonald's U.S. operations and is likely to speak at Wednesday's event. Kempczinski, Anderson, and the broader leadership team must convince investors who are growing increasingly skeptical. Over the past 12 months, McDonald's shares have fallen 18%, reducing its market capitalization to roughly $175 billion, while the S&P 500 has climbed 16% during the same period, buoyed by AI optimism that has offset concerns about consumer finances.

Here are four key expectations for the company's investor day presentation.

Value Strategy Under Scrutiny

Value pricing has been a critical battleground for restaurant chains over the past two years, as the industry competes for a limited pool of price-conscious yet experience-seeking customers. While competitors like Yum Brands and Restaurant Brands International have gained momentum, McDonald's has stumbled recently due to a cluttered promotional landscape that has diluted the visibility of its value deals. Additionally, franchisees have resisted discounting efforts, as promotions boost revenue but squeeze their profit margins, particularly with rising beef costs.

Executives revealed in August that only about two-thirds of U.S. franchisees had implemented the latest "under $3 menu" offerings. While McDonald's allows franchisees to set their own prices, the company evaluates whether store-level pricing delivers on its value promise. Analysts expect McDonald's to double down on value, with franchisee cooperation being essential to execution. Citi analyst Jon Tower wrote in a preview note: "We anticipate McDonald's will use this event to signal to franchisees that adherence to pricing guidance will be a key factor in franchise renewal evaluations." Tower also lowered his price target on McDonald's shares from $345 to $310, citing concerns about franchisee buy-in to the overall strategy.

Menu Evolution Takes Center Stage

Beyond value, McDonald's aims to attract customers with new items that emphasize taste and quality. Rising beef prices and pressure from competitors like Chick-fil-A have pushed the company to expand its chicken offerings in recent years. At the franchisee convention, executives teased a next-generation chicken product featuring hand-breaded preparation. This method, already used by Chick-fil-A, Raising Cane's, and Popeyes, delivers a crispier coating but requires more labor and preparation time.

In addition to its chicken line, McDonald's has been aggressively building out its beverage business. After closing its beverage-focused spinoff brand CosMc's, the U.S. market has seen a wave of new offerings, including specialty sodas, fruit-flavored drinks, and energy beverages, while select international markets like Germany are also expanding their drink menus. Chief Financial Officer Ian Borden stated during the August earnings call: "Beverages are a critical category, and we will dive deeper into this topic at the investor day."

Store Remodeling and Capital Investment

McDonald's typically requires franchisees to renovate their locations roughly every decade to match new design standards, along with upgrades to equipment and technology. As part of its new growth strategy, another wave of store renovations is on the horizon, with franchisees receiving their first look at the redesigned store format at the recent convention. The company usually provides some financial support for remodeling projects, and upgraded locations typically generate higher sales. However, with elevated borrowing costs, franchisees must shoulder the financial burden of these renovations themselves.

Tariffs and rising energy prices have also driven up construction costs. BMO Capital Markets analyst Andrew Strelzik noted in a research report that remodeling plans could add $600 million to $900 million to McDonald's capital expenditures in 2027-2028 compared to its 2026 projections. Executives are expected to disclose the company's total estimated investment in the renovation program during Wednesday's presentation.

Cost Reduction Initiatives

While capital spending may trend higher over the next two years, McDonald's plans to trim expenses elsewhere. Borden indicated in August that the company would provide an outlook for its general and administrative (G&A) expenses at the investor day. Bernstein analyst Danilo Gargiulo wrote in a client note that McDonald's may target G&A costs below 2% of systemwide sales, down from the current 2.2% target. The company has already streamlined its workforce in recent years through organizational restructuring.

McDonald's is also pursuing cost savings indirectly through refranchising, selling company-owned locations to franchisees. By divesting these stores, the company shifts operational and capital costs to franchise partners. Borden confirmed that additional details on this plan would be shared at the investor day.