McDonald's sales zoom 20%, due partly to healthier menu

February gains are helped by salads, white chicken

March 06, 2004|By BLOOMBERG NEWS

OAK BROOK, Ill. - McDonald's Corp., the world's largest restaurant chain, said U.S. sales rose 20 percent in February, as salads and healthier choices such as white-meat Chicken McNuggets helped drive the biggest increase in purchases since the 1970s.

Global sales rose 14 percent at restaurants open at least 13 months, McDonald's said yesterday. An extra day in February because of leap year helped lift sales for the 11th straight month, the company said.

Chief executive James R. Cantalupo is increasing sales by adding higher-price foods, such as salads with Paul Newman dressings, and Happy Meals with fruits and vegetables for health-conscious customers. The company, which simplified its menu and kept restaurants open longer, is taking business from No. 2 hamburger chain Burger King Corp., analysts said.

"It shows the momentum continues," said Peter Goldman, who helps manage $1 billion at Chicago Asset Management, including McDonald's shares. "New products, better store focus and consumer focus are working."

February's extra day probably added about 3 percentage points to U.S. sales, Goldman said. He said he had expected U.S. sales growth of about 17 percent, including the additional day.

U.S. sales fell 4.7 percent in February 2003, a month after Cantalupo took over, as consumers trimmed spending and stayed home during snowstorms. McDonald's began releasing monthly sales figures that February. Last month's rise was the largest since the 1970s, spokeswoman Anna Rozenich said.

McDonald's shares rose $1.01, or 3.5 percent, to close at $29.85 on the New York Stock Exchange - the highest level since June 2002 - after at least one analyst upgraded the stock's outlook. They have more than doubled in the past year.

Comparable sales in Europe rose 7.7 percent last month, while sales in Asia, the Pacific, the Middle East and Africa rose 6.2 percent. The figures exclude sales from new and closed restaurants.

McDonald's is benefiting from the struggles of Burger King, which replaced its advertising agency in January amid declining sales. Robert T. Nilsen resigned as Burger King's president last month after a little more than a year on the job.

Burger King may have closed as many as 500 restaurants last year, most of them near a McDonald's, said Richard Adams, a consultant to McDonald's franchisees.

McDonald's has more than 30,000 restaurants, including about 13,000 in the United States.

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