* U.S. same-store sales up less-than-expected 1.7 percent
* Shares fall 1.6 percent
(Adds analyst comments, background, updates shares; changes
dateline, previously NEW YORK)
By Lisa Baertlein
LOS ANGELES, Sept 9 McDonald's Corp's (MCD.N)
August sales at existing restaurants rose 2.2 percent globally,
missing analysts' target, as strength in Europe partly offset
weakness in the United States and other parts of the world.
The No. 1 hamburger chain's shares fell 1.6 percent to
$55.33 in midday trading on the New York Stock Exchange and
dragged down the stocks of rivals Yum Brands Inc (YUM.N) and
Burger King Holdings Inc BKC.N.
Closely watched same-store sales rose 3.5 percent in
Europe, helped by Britain and France, and were up 1.7 percent
in the United States, where intense fast-food price competition
weighed on results. Comparable sales slipped 0.5 percent in the
company's Asia Pacific, Middle East and Africa (APMEA) segment,
McDonald's said on Wednesday.
Analysts had expected U.S. same-store sales to rise 2.8
percent. On a global basis, some estimates called for a
same-store sales increase of as much as 3 percent.
U.S. same-store sales are "mired in the low single-digit
range," Jefferies & Co analyst Jeff Farmer said in a client
Farmer expects McDonald's U.S same-store sales to remain
below 4 percent for the balance of the year, "making a
sustained move to $60 very difficult for the shares."
The world's largest hamburger chain said its U.S. sales
were supported by the new premium Angus Third Pounder burger
and new McCafe coffee drinks.
McDonald's and some other fast-food restaurants have
benefited as the global economic downturn has led diners to
seek lower-priced fare, but long-term economic doldrums and a
9.7 percent U.S. unemployment rate have taken a bite out of
profitable breakfast and beverage sales.
McDonald's said systemwide sales rose 1.1 percent in
August, but were up 4.1 percent excluding the impact of
Stifel Nicolaus analyst Steve West said he expects foreign
exchange to have a "less negative" impact going forward.
Due to diners' continued cautious spending, McDonald's has
turned its advertising focus to its core and value menus and
away from higher-priced food items -- with the exception of the
new Angus burger, which is being introduced across the United
Shares in Yum, which owns the KFC, Taco Bell and Pizza Hut
brands, were down 1.9 percent at $33.54, while Burger King's
stock was off less than 1 percent at $18.00.
(Additional reporting by Martinne Geller; editing by Gerald E.
McCormick and Maureen Bavdek)