McDonald's Corp., the world's largest restaurant company, reported August sales that rose more than some analysts estimated as consumers bought iced coffee in the U.S. and burgers in Europe.
Global sales at restaurants open at least 13 months climbed 8.5 percent compared with a year earlier, helped by an 11.6 percent gain in Europe and the dollar's decline against other currencies, the Oak Brook, Illinois-based company said today. The shares rose 3.2 percent in New York trading.
McDonald's posted its biggest global increase since February, which had an extra selling day because of the leap year. The restaurant company, led by Chief Executive Officer Jim Skinner, sold more burgers with bacon in the U.K. and France, and spurred U.S. and Australian sales with advertising tied to the Summer Olympics in Beijing. Sweet iced tea and $1 soft drinks appealed to U.S. consumers grappling with higher food and fuel costs.
``McDonald's does well in bad economies because people trade down,'' John Kornitzer, who oversees $5 billion at Kornitzer Capital Management, said yesterday in an interview. The Shawnee Mission, Kansas-based firm owned 189,710 McDonald's shares through June. ``They know how to roll out new products.''
Sales in the U.S. advanced 4.5 percent while gaining 10 percent in the region encompassing Asia, the Pacific, the Middle East and Africa, McDonald's said in a statement.
Three analysts estimated a median increase of 4.7 percent globally, 6 percent in Europe and 3.5 percent in the U.S., according to projections compiled by Bloomberg News.
Shares Rise
McDonald's advanced $1.98 to $64.40 at 10:02 a.m. in New York Stock Exchange composite trading. The shares, which advanced 6 percent in 2008 before today, have risen for five straight years.
Global same-store sales in August 2007 climbed 8.1 percent.
Snack-sized chicken wraps and Big Tasty burgers spurred sales in France while U.K. sales rose on breakfast foods, McDonald's spokeswoman Heidi Barker said today in a telephone interview. Olympics promotions lifted sales in the U.K. and Australia.
McDonald's introduced new chicken sandwiches and biscuits in April in the U.S. to compete with Burger King Holdings Corp. and Wendy's International Inc., which are also selling discount burgers and breakfast foods aimed at consumers pinched by rising fuel and grocery costs.
Same-store sales gains in the U.S. were ``nearly double the U.S. fast-food industry,'' David Palmer, a UBS Securities LLC analyst in New York, wrote today in a note to clients. He recommends investors hold McDonald's shares.
Higher Costs
The cost of living was up 5.6 percent in the year ended in July, the biggest jump in 17 years, the U.S. Labor Department said last month.
Over the next year and a half, McDonald's is installing counters to sell cappuccino and lattes, after adding a new blend of coffee in 2006 to capture sales from Starbucks Corp.
Almost all of McDonald's more than 13,800 U.S. restaurants are selling iced coffee while more than two-thirds are offering sweet iced tea, spokesman William Whitman said Aug. 28.
Europe's sales have grown fastest among global regions this year, spurred by snack-sized chicken sandwiches in France and higher-priced burgers in the U.K. and Germany.
The U.S. dollar fell 6.2 percent in August 2008 compared with a year earlier, based on the average monthly price against six other currencies.
