McDonald's January Same-Store Sales Up 7.1 Percent
The nation's No. 1 hamburger chain has been posting strong sales as the economic downturn in the U.S. spreads overseas and people turn away from pricier restaurants to grocery stores and fast-food outlets.
In the U.S., sales at locations open at least a year rose 5.4 percent. The Oak Brook, Ill.-based chain said strong sales of its breakfast offerings and "value across the menu" boosted the U.S. results.
Those results proved "the 'recession-resistant' mantra is still strong," Stifel Nicolaus analyst Steve West said in a note to investors.
Internationally, same-store sales rose 7.1 percent in Europe, led by sales in the U.K., France and Russia. They rose 10.2 percent in the Asia-Pacific region, the Middle East and Africa.
"McDonald's continues to appeal to customers as we offer high-quality, affordable meal options and unparalleled convenience," Chief Executive Jim Skinner said in a statement.
The 7.1 percent rise in worldwide same-store sales came on top of a 5.7 percent rise in January of 2008.
Total sales rose 2.6 percent in January. Excluding the effect of foreign exchange rates, sales were up 9.1 percent. McDonald's, like most U.S. companies that sell goods overseas, translates sales in other currencies back into dollars. When the dollar is stronger than currencies abroad -- like it is now -- the resulting dollar figure is lower.
West said the drag from unfavorable exchange rates was the "only negative aspect" of the results and said stronger sales should help offset the negative effect.
West has a "Buy" rating on the shares and a $70 target price, meaning he expects the stock to rise about 20 percent in the next year.
February's sales results may not be as positive, even if customers continue lining up for the chain's burgers and fries. Skinner said same-store sales in February will be hurt by 4 percentage points because results last year included one extra day due to leap year.
Shares fell 14 cents to $58.32 in morning trading.
AP Business Writer Betsy Vereckey contributed to this report.