McDonald's July same-store sales rise 8 percent

NEW YORK — Despite a tough U.S. economy, McDonald's Corp. posted an 8 percent gain in July same-store sales Friday as hungry consumers worldwide lined up for breakfast items and the Big Mac sandwich.

Many consumers have cut back on eating out amid economic weakness and rising gasoline prices, but business at the Golden Arches held up well in July, especially in the U.S.

Same-store sales, or sales at stores open at least 13 months, grew 6.7 percent in the U.S. Same-store sales are a key indicator of restaurant performance because they measure growth at existing locations rather than newly opened ones.

Total sales worldwide soared 15.9 percent. The world's biggest hamburger chain attributed the strong domestic performance to its focus on breakfast, chicken and drink items. McDonald's rolled out a new chicken biscuit breakfast sandwich, a chicken sandwich for lunch and espresso-based coffee drinks in certain locations.

Advertising for its Big Mac sandwich also boosted results in July, the Oak Brook, Ill.-based company said.

International sales have typically been strong for McDonald's — a trend that continued in July. Same-store sales jumped 7.6 percent in Europe, led by sales in Britain, France and Russia. And in the Asia-Pacific, Middle East and Africa region, same-store sales climbed 7.2 percent because of extended hours and menu items.

Shares of the Dow Jones industrial average component rose $3.81, or 6.2 percent, to $65.67. Earlier in the session, the stock hit $66.24, an all-time high.

Deutsche Bank analyst Jason West said results were strong across all regions, but called the U.S. a "particular standout."

Cowen & Co. analyst Paul Westra expects momentum to continue as McDonald's rolls out specialty coffee beverages in more locations.

The Beijing Olympics also offers McDonald's an opportunity to further market promotional tie-ins, Westra said. McDonald's is a sponsor of the games, which started Friday.

The strong July performance from McDonald's comes amid rising costs that are affecting many other companies in the restaurant industry.

Last month, McDonald's warned of rising beef and chicken costs and said it may tweak its popular dollar menu to help offset some of this weakness. Soaring prices for corn and soybeans, which are main ingredients in animal feed, have boosted prices for beef and chicken.