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McDonald's notches 8th straight monthly gains in US sales
( 2003-12-09 09:09) (Agencies)

McDonald's Corp. (MCD) Monday posted a 10.2 per cent rise in sales at U.S. stores open more than a year, its eighth straight monthly gain, as a strategy emphasizing new menu items and youth-oriented marketing lifted revenue.

The world's largest fast-food company, which plans soon to disclose the fate of its non-hamburger brands, also posted a 1.9 per cent increase in same-store sales in Europe, its second most important region after the United States. It was the third rise in European sales in four months.ts said they were heartened by McDonald's international results, which have lagged in recent months while the company's primary U.S. market has undergone a turnaround.

"We view very solid comp gains in Europe and (Asia) as a positive, as the worldwide focus on operations and branding are making an impact," Banc of America Securities analyst Andrew Barish said in a report. "We believe the international improvement is not fully discounted in the stock as the global economy improves."

Barish rates shares of McDonald's a "buy." The stock, a Dow Jones Industrials component, fell 37 cents to close at $25.62 on the New York Stock Exchange.

Same-store sales at McDonald's U.S. stores, which represent about 40 per cent of its 30,000 hamburger restaurants, were at the top end of analysts' expectations.

They benefited from new menu items like all-white-meat chicken McNuggets, a Monopoly game and other in-store promotions, extended store hours and "I'm Lovin' It," the company's first global advertising campaign, which was launched in September.

McDonald's "is broadening the customer base," said Amy Kaser, an analyst with Loomis Sayles, whose firm holds 1.3 million McDonald's shares. "Women are coming in and they're bringing their kids."

She and other analysts had been worried that McDonald's U.S. results might weaken in the winter months as demand for blockbuster menu additions like entree-sized salads -- sometimes perceived as a seasonal item -- tapered with the colder weather.

Analysts have also noted that improving economic trends are helping the U.S. fast-food sector. Wendy's International Inc. , the third-largest hamburger chain, last week reported its second straight month of robust sales and raised its full-year earnings outlook.

Combined same-store monthly sales in the McDonald's Asia, Middle East and Africa region gained 4.1 percent, the Oak Brook, Illinois-based company said.

McDonald's total November worldwide sales jumped 14.9 percent, lifted in part by favorable foreign exchange rates.

The company said it would finalize decisions about the non-hamburger "partner brands," including Donatos Pizza, Boston Market and Chipotle, in coming weeks.

Analysts have speculated the company might sell off those chains as it narrows its focus to improving operations at its flagship stores. Actions related to the brands will result in a charge, which McDonald's said it will soon estimate.

 
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