McDonald's Corp. on Tuesday reported an 8.1 percent rise in August same-store sales, easily beating analysts' expectations on strong breakfast and beverage sales in the United States and extended store hours in China and Australia.
Results were several percentage points better than most Wall Street estimates and stood in stark contrast to recent weak results posted by many other restaurant chains and retailers. Shares of the world's largest restaurant company rose 4.6 percent following the announcement.
In the same period last year, McDonald's same-store sales rose 6 percent.
Even tough laps and a pinched consumer do not seem to be a major impediment to McDonald's year-to-date sales momentum, Goldman Sachs analyst Steven Kron wrote in a client note. Kron has a conviction buy rating on McDonald's shares.
In the United States, sales at restaurants open at least 13 months rose 7.4 percent, helped by sales of new menu items such as the Chipotle Chicken Snack Wrap, Cinna Melts, iced coffee and sweet tea.
European same-store sales rose 6.1 percent thanks to a Mediterranean menu promotion in Germany that featured a hamburger with black olives and tomatoes and a shrimp lemon burger.
Sales in France were helped by promotions for a chicken sandwich with cheese and a special dessert. In Britain, the company featured a Big Tasty burger with barbecue sauce and a barbecued chicken sandwich with bacon.
In the company's Asia, Middle East and Africa unit, same-store sales rose 12.4 percent, helped by extended store hours in Australia and China and a new value menu and student card in China. The company said sales in Japan benefited from a caramel and Oreo cookie dessert and a Big Mac promotion.
Lehman Brothers analyst Jeffrey Bernstein said same-store sales in all regions beat his expectations, leading him to raise earnings estimates for the third and fourth quarters each by a penny per share on continued sales momentum and effective cost controls.
In a research note, Bernstein said he considers McDonald's a relatively safe investment in a very difficult macro-environment with sales strong (and) stable, (and) costs well managed.
McDonald's shares were up $2.28 at $52.43 on the New York Stock Exchange. They have gained more than 18 percent this year, outperforming the Standard & Poor's 500 Index, which is up about 3 percent in the same period.