UPDATE 3-McDonald's leaves rivals in the dust as sales rise

* Sept same-store sales up 6.1 percent, topping view

* Q3 EPS $1.29 vs Street view $1.25

* Sees Oct global same-store sales up 5 to 6 percent

* Shares up more than 2 pct, hit new all-time high (Revises first paragraph, adds analyst comments, updates share action, adds LOS ANGELES to dateline)

By Lisa Baertlein and Ben Klayman

LOS ANGELES/DETROIT, Oct 21 (Reuters) - McDonald's Corp (MCD.N) is putting more distance between itself and many fast-food rivals with a recipe of new products like fruit smoothies, low-priced food and spiffed-up restaurants.

The world's largest hamburger chain said September sales at established restaurants were far better than Wall Street's expectations and forecast a jump in October that would also outpace analysts' targets.

Shares of the company rose more than 2 percent and hit a new all-time high after it also posted a stronger-than-expected quarterly profit.

"McDonald's is full-steam ahead and they'll continue to take market share domestically and on an international basis," said Telsey Advisory Group analyst Pete Saleh.

Executives said they expect sales at restaurants open at least 13 months to rise 5 to 6 percent in October. That was ahead of the 3.7 percent rise expected by Janney Capital Markets analysts Mark Kalinowski and above Saleh's call for a rise of 5 percent.

McDonald's has been stealing U.S. market share from rivals like Burger King. 3G Capital this week closed its purchase of the second-biggest hamburger chain and is taking it private. [ID:nWNAB5228]

(For a graphic on U.S. fast-food market share, see: r.reuters.com/tek49p )

Saleh expects those market share gains to accelerate as Burger King's new owners study the business and put together a strategic plan.

Shares of McDonald's hit a session high of $79.48 and were up 2.2 percent at $79.10 in late morning on the New York Stock Exchange. The stock hit its previous high of $78.14 on Oct 20.

STRONG SEPTEMBER

September same-store sales at the Golden Arches rose 5.7 percent in the United States, 4.9 percent in Europe and 6.2 percent in the Asia-Pacific, Middle East and Africa (APMEA) unit. Global same-store sales rose 6.1 percent.

Analysts had expected U.S. sales to rise 3.8 percent, Europe to rise 2.7 percent, APMEA to increase 4.4 percent and global to jump 3.8 percent.

McDonald's derives 35 percent of its revenue from the United States and credited its frappes and smoothies as well as demand for Dollar Menu items for the strong U.S. sales.

It said sales in Europe, its most important market with just over 40 percent of revenue, outperformed even though consumers overall have cut down on outings to fast-food restaurants. McDonald's has a bigger footprint in Europe than any other U.S. restaurant operator.

Third-quarter net income rose 10 percent to $1.39 billion, or $1.29 a share. Analysts, on average, were looking for $1.25 per share, according to Thomson Reuters I/B/E/S.

Third-quarter revenue, which included sales from company-owned restaurants plus royalties from franchisees and other fees, rose 4 percent to $6.3 billion, topping the $6.23 billion analysts had expected.

While McDonald's leads rival Yum Brands Inc (YUM.N) in the United States, it lags the parent of KFC and Pizza Hut in China, which is posting the fastest economic growth of any major global economy.

Earlier this month, Yum said sales at established restaurants in China rose 6 percent for the third quarter, which ended Sept. 4. Sales in the United States and in international markets outside of China rose just 1 percent. [ID:nN06259071]

Most of Yum's nearly 3,700 China restaurants are KFC. Yum has more than twice as many restaurants in China as McDonald's.

"Yum happens to be our top pick," said Kalinowski. "McDonald's, we think, has a little bit less risk involved than Yum, but we think Yum is an outstanding stock to own at this point in time, too."

At the close of trade on Wednesday, shares of McDonald's and Yum were up 34 percent and 39 percent, respectively, for the year to date. That compares with a 27 percent gain in the Dow Jones U.S. Restaurant and Bars index .DJUSRU. (Reporting by Ben Klayman; additional reporting by Lisa Baertlein, editing by Gerald E. McCormick, John Wallace and Matthew Lewis)