UPDATE 3-No McDonald's $1 breakfast menu decision yet -exec

* U.S. breakfast dollar menu under consideration

* Sticks by annual financial targets

* Plans to open 1,000 restaurants next year
(Adds details on Dollar Menu plans; updates share move)

By Brad Dorfman and Lisa Baertlein

CHICAGO/PALM SPRINGS, Calif., Nov 12 (Reuters) - McDonald's
Corp (MCD.N) is considering rolling out a breakfast "Dollar
Menu" nationally, but a final decision has not been made, U.S.
president Don Thompson told investors on Thursday.

McDonald's restaurants in Chicago and other markets have
been offering breakfast items for $1 each as rising U.S.
unemployment means fewer people are stopping in for a morning
meal on their way to work.

A plan to offer the low-price breakfast menu nationwide
during the first six months of 2010 has cleared early hurdles.
Executives said they continue to explore it as an option as
they also boost their emphasis on "everyday value."

In Chicago, participating restaurants have offered six $1
items: two hot cakes, a fruit 'n yogurt parfait, a sausage
biscuit, a sausage McMuffin, two hash browns or medium coffee.

Chief Executive Jim Skinner recently said high unemployment
has had "some impact" on the breakfast business at McDonald's,
which accounts for about a quarter of U.S. sales.

McDonald's helped pioneer the use of "value menus" at
fast-food chains and has used its own Dollar Menu to draw
cash-strapped diners amid the worst recession since the Great
Depression.

Falling prices for meat, cheese and other key foods have
made it easier for restaurant chains to protect profits while
attempting to lure customers with discounts. But discounting
has become rampant, threatening industry margins.

GROWTH CHALLENGE

McDonald's is one of the restaurant industry's best
performing names and has been gaining share during the economic
downturn that took hold in 2007.

But while it is faring better than many rivals, McDonald's
is not immune. Its growth recently slowed in the United States,
where joblessness has topped 10 percent and is expected to head
higher.

Earlier this week the company said sales at U.S. stores
open at least 13 months dipped 0.1 percent in October, the
first decline since March 2008.

The company plans to spend $2.4 billion on capital
improvements in 2010 as it continues to revamp restaurants and
expand in emerging markets.

Half of the spending will be on new restaurants and the
other half will be spent on remodeling existing restaurants,
Chief Financial Officer Pete Bensen said.

McDonald's, which has more than 32,000 restaurant, plans to
open 1,000 restaurants next year, Bensen said. The company
plans to open more restaurants with drive-throughs, which cost
more, but have higher returns,

The company plans to open 150-175 restaurants in China and
40 in Russia, both fast-growing emerging markets.

The company also said it continues to exceed its long-term
targets of 3 percent to 5 percent annual sales growth and 6
percent to 7 percent operating income growth, excluding
currency fluctuations.

McDonald's shares fell 66 cents, or 1.1 percent, to close
at $62.17 on the New York Stock Exchange.
(Reporting by Lisa Baertlein and Brad Dorfman; Editing by Tim
Dobbyn and Matthew Lewis)