UPDATE 4-McDonald's same-store sales rise in Jan; shares up

Mon Feb 9, 2009 12:02pm EST

* January global same-store sales up 7.1 pct

* U.S. January same-store sales up 5.4 pct

* Shares rise more than 1.5 percent (Recasts; Adds company and analyst comment, updates share activity; Changes dateline, previously NEW YORK)

By Lisa Baertlein

LOS ANGELES, Feb 9 (Reuters) - McDonald's Corp (MCD.N) on Monday posted a better-than-expected 7.1 percent rise in global January sales at restaurants open at least 13 months, driven by strength in nearly all of its markets.

McDonald's and other fast-food restaurants have benefited as a global economic downturn sent diners to lower-priced fare.

The restaurant's shares were up 1.5 percent on the results while rivals Burger King Holdings Inc BKC.N and Wendy's/Arby's Group WEN.N were down 1.8 percent and 2.0 percent, respectively.

"2009 is off to a good start for McDonald's," Chief Executive Jim Skinner said in a statement.

The January global sales result easily topped several analysts' targets.

Stifel Nicolaus analyst Steve West was looking for a global same-store sales rise of 4 percent to 5 percent, while UBS analyst David Palmer had called for a 6.1 percent uptick in worldwide sales.

"I was thinking January was going to be a pretty soft month. But again, these guys continued to thrive in a down economy," said Morningstar restaurant analyst R.J. Hottovy.

The world's largest hamburger chain said January same-store sales rose 5.4 percent in the United States due to demand for McDonald's core menu and breakfast items.

"The 'recession-resistant' mantra is still strong," West said in a note, adding that he was looking for 5 percent growth in U.S. same-store sales as breakfast, chicken and strong value sales continued to drive business.

Same-store sales rose 7.1 percent in Europe, driven by strong results in Britain, France and Russia.

"Weather was a (significant) negative for the month in mainland Europe," UBS analyst Palmer said in a note in which he added that Germany's results were slightly negative.

McDonald's said sales in its Asia/Pacific, Middle East and Africa segments rose 10.2 percent due to strong growth in Australia, China and other countries. Locally tailored chicken and beef menu items, convenient operating hours and Chinese New Year promotions aided sales, McDonald's said.

Systemwide sales rose 2.6 percent for the month. Excluding the impact from a strengthening U.S. dollar, sales rose 9.1 percent.

Foreign exchange rates have the capacity to impact earnings in the current quarter, Hottovy said, but noted that the pain would be temporary.

"Generally I like the long-term prospects (of McDonald's) even with this short-term pressure," Hottovy said.

McDonald's said same-store sales this month would suffer by 4 percentage points since February 2008 was a leap year, giving the company an extra day of sales.

McDonald's shares were up 90 cents, or 1.5 percent, at $59.37 on the New York Stock Exchange. (Additional reporting by Martinne Geller; Editing by Lisa Von Ahn and Maureen Bavdek)

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