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NEW YORK - McDonald's said overnight that November same-store sales at its hamburger restaurants rose 6.2 per cent, boosting the company's shares to a seven-year high, as Snack Wraps, premium coffee and family game promotions attracted customers.
The world's largest restaurant company "is hitting on all cylinders," Bank of America analyst Andrew Barish wrote in a research note.
Two Wall Street analysts had expected an increase of about 4.5 per cent, according to research notes. Same-store sales track sales at stores open at least 13 months, and are considered an important measure of growth trends.
Shares of McDonald's, which have climbed about 30 per cent this year, rose 1 per cent in midday trading to US$43.68 ($64.05) on the New York Stock Exchange.
In the United States, McDonald's largest market, same-store sales rose 5.1 per cent, driven by the popularity of the new Snack Wrap - a chicken-filled tortilla - and breakfast offerings such as a premium coffee blend. During November last year, sales had risen 4.8 per cent.
In Europe, same-store sales were up 8.4 per cent, with particular strength in Germany and France after sales were flat during November of last year.
Over the past two years, the fast food giant, known for its hamburgers, fries, and most recently, chicken sandwiches, has racked up US and international sales growth of 9.4 per cent, according to research firm Morningstar.
"That's a fantastic result," said Morningstar analyst John Owens. "It's especially impressive for McDonald's, which already has the highest average unit volume in the fast food industry."
Systemwide sales rose 10.5 per cent. Stripping out the effect of foreign currency, sales were up 7.2 per cent, Oak Brook, Illinois-based McDonald's said.
Company spokesman Bill Whitman attributed the better sales to higher-quality coffee bringing customers to the stores throughout the day, a wider array of chicken sandwiches and the Asian salad, as well as innovations such as wireless computer access in some locations.
Through Thursday's close, McDonald's stock was selling at 16.9 times next year's expected earnings, less than the average 20.4 times for companies in the Standard & Poor's restaurant index. .SPREST.
Still, Morningstar's Owens noted that over the next five years, analyst consensus figures showed that the restaurant industry was expected to post earnings growth of 17 per cent, while McDonald's growth was forecast in the 9-per cent range.
"Next year, it will become an even greater challenge to generate sales growth," he said. "It's inevitable that it will slow down at some point."
The company operates about 30,000 restaurants in more than 100 countries.
- REUTERS
