New summer drinks in the United States and longer hours in Europe helped McDonald's Corp sales beat Wall Street forecasts for July and lifted its shares to their highest ever.

McDonald's said global sales at restaurants open at least 13 months rose 7 percent in July, compared with analysts' expectations for an increase closer to 5 percent.

The strong sales show McDonald's is succeeding in reinventing its menu and image, winning new diners in a weak economy that has hurt rivals, analysts said.

Over the last several years, they've been very successful at improving the quality of their food, said Stifel Nicolaus & Co analyst Steve West. They've really invested in their brand.

While U.S. high unemployment persists, the fast food company's appeal to families and retirees has helped it steal market share from chains like Burger King and KFC, which is owned by Yum Brands Inc .

McDonald's has more broad-based appeal. They're not as exposed to single white males, West said, noting that group has been particularly hard-hit by the economy. McDonald's is appealing to soccer moms. They're appealing to high-end consumers.

U.S. sales, which account for about 35 percent of the company's business, benefited from the introduction of Real Fruit Smoothies and Frappes from its McCafe line of drinks.

A record-setting heat wave in parts of the country and an extra Saturday in July also fueled the 5.7 percent rise in U.S. same-restaurant sales, said Edward Jones analyst Jack Russo.

Shares of McDonald's were up 1.5 percent at $72.85 in afternoon trading on the New York Stock Exchange. Earlier in the session, the shares reached $73.33, an all-time high since the chain went public in 1965 at $22.50 per share. Burger King rose 1.1 percent while Yum gained 1 percent.


In Europe, same-restaurant sales rose 5.3 percent, led by gains in France, Britain and Germany. McDonald's has been renovating restaurants and extending hours in the region, which was the largest revenue contributor last year at 41 percent.

Same-store sales rose 10.1 percent in the Asia/Pacific, Middle East and Africa area. The company said Japan, Australia and China were standouts. Nearly 8,500 of McDonald's 32,500 restaurants are located in that region, which contributed nearly 20 percent of its revenue in 2009.

McDonald's plans to double its network in China to more than 2,000 outlets by 2013.

Systemwide sales rose 6.8 percent, or 8.3 percent on a constant currency basis.

McDonald's said last month that the U.S. roll-out of espresso-based coffee and other high-margin drinks like Frappes had exceeded the company's goal of adding $125,000 of sales per unit.

The company's beverage expansion was seen as a direct attack on the core business of coffee shop chain Starbucks Corp , but so far the two companies appear to be appealing to different customers.

(Reporting by Phil Wahba; Editing by Michele Gershberg, Dave Zimmerman, Robert MacMillan and Steve Orlofsky)