|
OAK BROOK, Ill. (AP) -- McDonald's Corp. reported impressive August sales Tuesday, attributing a better-than-expected 8.1 percent increase in same-store results to strong demand for its breakfast items, drinks and new Chipotle chicken wrap as well as a continuing turnaround in Europe. The monthly sales report sent shares in the world's largest restaurant company up more than 4 percent in morning trading and helped propel the Dow Jones Industrial Average higher. The Oak Brook-based chain said its U.S. same-store sales grew 7.4 percent, which exceeded analysts' estimates. Besides the product popularity, some areas' later start to the school year also helped. Europe same-store sales rose 6.1 percent, driven by positive sales growth in the United Kingdom, France and Germany -- its three biggest European markets. In the Asia/Pacific, Middle East and Africa division, same-store sales increased 12.4 percent due to breakfast, menu promotions and extended hours, McDonald's said. Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance because it measures growth at existing stores rather than newly opened ones. Total systemwide sales, which include restaurants owned by franchisees and affiliates operating under joint-venture agreements, rose 12.3 percent for August. Analysts said they were impressed by the significant percentage increases in the face of growing economic pressure on some consumers, tough comparisons to impressive 2006 sales and higher U.S. dairy, poultry and labor costs. "Even tough laps and a pinched consumer do not seem to be a major impediment to McDonald's year-to-date sales momentum," Steven Kron of Goldman Sachs said in a note to investors. Jason West of Deutsche Bank North America said the McDonald's brand is strong enough for the company to increase prices as needed to offset rising costs. "The U.S. business extends its particularly strong growth streak, while the European business continues to drive impressive sales with a focus on improved menu variety, better marketing and an overall improvement in consumer perception of the brand," wrote Andrew Barish of Banc of America Securities. "While there could be bumps in the road due to tough comparisons, the business remains strong." McDonald's hopes to build on its strong breakfast sales by introducing a breakfast burrito in its U.S. restaurants later this year. Its shares rose $1.61, or 3.21 percent, to $51.76 Tuesday.
|