McDonald's Corp said on Thursday same-store sales rose 5.7 percent in February, beating analysts' estimates on strong US demand for new varieties of its chicken Snack Wrap and improved performance in France, Germany and China. Shares of the world's largest restaurant company rose more than 2 percent following the announcement.
Four Wall Street analysts' estimates ranged from increases of 2.5 percent to 4.4 percent, according to research notes. The results were particularly impressive given that overall US restaurant industry sales weakened last month due to harsh winter weather, according to UBS analyst David Palmer. "February sales underscore the benefits to shareholders of a global business with multiple initiatives driving positive sales," Palmer wrote in a note to clients.
Same-store sales, which track sales at restaurants open at least 13 months, rose 3.1 percent in the United States. In a statement, Oak Brook, Illinois-based McDonald's said its breakfast menu and late-night hours contributed to that gain. In addition, the company said new grilled and honey-mustard versions of its chicken Snack Wrap helped boost performance in its flagship market.
In Europe, McDonald's No 2 market, same-store sales rose 5.9 percent as restaurants in France and Germany benefited from seasonal menus. In McDonald's Asia-Pacific business, same-store sales increased a sharp 12.3 percent. The hamburger chain said performance was strong in Japan and China, where the Chinese New Year holiday fed demand. McDonald's has been working aggressively to boost its performance in China, a market it has targeted as a major growth opportunity.
McDonald's shares were up 88 cents, or 2 percent, at $43.98 in early trading on the New York Stock Exchange. The stock is down about 0.8 percent since the beginning of 2007 and trades at about 15.2 times analysts' average 2008 earnings estimate. That compares with a multiple of 15.8 for Taco Bell and Pizza Hut parent Yum Brands Inc and 17 for No 2 burger chain Burger King Holdings Inc.
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