McDonald's Corp.'s chief executive sees plenty of room to increase U.S. sales and said it continues to review its debt levels, which it will discuss on a conference call with analysts next week.

We continue to have huge upside potential in the United States, CEO Jim Skinner said in an interview on Monday after the world's largest restaurant company said second-quarter profit before one-time items would top Wall Street estimates.

The hamburger chain's U.S. business has enjoyed overwhelming success in the last four years thanks to new products such as chicken sandwiches and a stronger coffee blend, extended restaurant hours, and cashless payments.

Yet many wonder how much longer it can maintain that momentum. Skinner said a 4.2 percent rise in sales at its U.S. restaurants open at least 13 months was evidence that opportunities to boost business in the company's home country remain strong.

When you look at the upside potential of the informal eating out market ... much of that growth is here, Skinner said, adding that that market was expected to grow by $50 billion this year worldwide.

In addition to revitalizing sales at its more than 30,000 outlets, McDonald's in the last four years has shed secondary restaurant brands such as Chipotle Mexican Grill Inc. and funneled cash into returning billions of dollars to shareholders.

Skinner said the company would continue to use cash for share buybacks and dividends as well as to invest in its business. The company plans to pay out $5.7 billion for dividends and share buybacks in 2007 and 2008.

REVIEWING LEVERAGE

Skinner also said McDonald's continues to review its debt levels.

Almost all companies can afford to lever up more, he said. We continue to look at it and we'll talk about where we are on the call on the 24th. The company reports results July 24 and will host a conference call with analysts that day.

Last month, activist investor Bill Ackman, whose hedge fund Pershing Square Capital Management has a McDonald's stake and has sought changes at the company in the past, said in a speech the burger chain could raise its debt leverage. By borrowing to fund growth, buy back shares or pay dividends, a company can lift returns per share without staking more of its own equity.

McDonald's shares have more than quadrupled since early 2003 but have been relatively unchanged for the last two months. They rose just 19 cents, or 0.4 percent, to close at $52.10 on Monday after the company said it expected to earn 71 cents a share for the second quarter, not including costs related to the sale of restaurants in Latin America.

Analysts had been expecting earnings, before items, of 67 cents a share. Including the sale, McDonald's expects to post a net loss of 60 cents a share for the quarter.

In a research note on Monday, UBS analyst David Palmer said the company's ongoing transition to steady and sustainable growth is still underappreciated. Goldman Sachs analyst Steven Kron agreed, saying McDonald's stock price does not reflect the staple-like business model, which he said will only improve as the company executes its strategy of selling more of its company-owned restaurants to franchisees.

Skinner said improvement would involve more of what has already benefited the chain over the last four years: new products and improved operations.

It's more of the same that gets us greater success, Skinner said.

Asked if he was concerned that sticking to that strategy could invite the interest of activist investors such as Ackman, Skinner said McDonald's always pays attention to suggestions, but that I wouldn't say it concerns me.