* Q4 EPS 87 cents, tops Wall Street view by 4 cents
* Q4 revenue $5.57, below analysts' estimates
* Worldwide same-store sales rise 7.2 percent
* Shares fall 0.5 percent
(Recasts, adds analyst and company comments, share move)
By Martinne Geller and Lisa Baertlein
NEW YORK/LOS ANGELES, Jan 26 McDonald's Corp
(MCD.N) reported a quarterly profit that handily topped Wall
Street estimates, but said it saw growth in some overseas
markets soften as a U.S.-led recession went global.
Shares of the world's largest hamburger chain were down 0.5
percent in afternoon trade after falling as much as 2.6 percent
earlier in the session.
McDonald's posted a 5.8 percent rise in worldwide December
sales at restaurants open at least 13 months.
The results are still ahead of most other restaurant
operators, but mark a slowdown from the company's own November
and October results, when McDonald's said same-store sales rose
7.7 percent and 8.2 percent, respectively.
Jack Russo, an analyst at Edward Jones, said the slowdown
was most prominent in international markets and showed that the
"rest of the world is catching up" to the U.S. recession.
The slowdown "is affecting everybody at this point. But
compared to the other carnage out there, these guys are still
doing pretty good," he said.
Fourth-quarter net income fell 23 percent to $985.3
million, or 87 cents per share, from $1.27 billion, or $1.06
per share, a year earlier, when results included a large
Analysts on average were expecting profit of 83 cents per
share, according to Reuters Estimates.
McDonald's cited a "softening" in its business in Germany
as diners reacted to price hikes. It also said fourth-quarter
same-store sales decelerated in China, where growth was once
Company executives said the world's largest economies are
sliding simultaneously into recession, but that McDonald's
same-store sales continue to be strong in January, with each
area of the world reporting positive results.
"Our model remains recession-resistant," Chief Executive
Jim Skinner said on a conference call with analysts.
McDonald's shares were down 22 cents at $57.80. Shares in
rival Yum Brands Inc (YUM.N), which owns the Taco Bell, Pizza
Hut and Kentucky Fried Chicken brands and has a bigger presence
in China, fell 3.6 percent.
McDonald's, which offers a range of menu items for $1, has
cemented its lead position by appealing to budget-conscious
diners struggling with rising unemployment and sharp drops in
home and investment values.
Revenue fell 3 percent to $5.57 billion, below the nearly
$5.7 billion expected by Wall Street. McDonald's said it was
hit by a stronger dollar in many foreign markets, including
Canada, Europe, Britain and Australia.
Global same-store sales rose 7.2 percent in the quarter.
Same-store sales rose 10 percent in the Asia/Pacific, Middle
East and Africa markets, 7.6 percent in Europe and 5 percent in
the United States.
In Europe, same-store sales rose 5.4 percent in December,
compared with rates of 9.8 percent in October and 7.8 percent
in November. The Asia segment had a December rise of 5.7
percent, versus 11.5 percent in October and 13.2 percent in
McDonald's said its U.S. business benefited from the
addition of the Southern Style Chicken biscuit and sandwich,
improved service at its drive-through windows, and the
expansion of its high-end coffee drinks.
For 2009, McDonald's forecast capital spending of $2.1
billion, with about half of the total being invested in
existing restaurants and the rest being used to open about
1,000 new restaurants.
It forecast 2009 food costs would rise 5 percent to 5.5
percent in the United States, where they rose 7 percent in
2008. As a result of easing food price inflation, it said it
probably will not raise prices as much as usual in the early
part of this year.
(Editing by Maureen Bavdek and John Wallace)