McDonald’s Sales Top Estimates on Dollar Menu, Coffee Sales Skyrocket!

McDonald’s Corp., the world’s largest restaurant company, said global sales rose 7.7 percent in November, topping some analysts’ estimates, after it sold more $1 double cheeseburgers and coffee to cash-strapped consumers.

Sales at U.S. locations open at least 13 months increased 4.5 percent, while European purchases advanced 7.8 percent, McDonald’s said today in a statement. Analysts projected global sales would climb 5.2 percent, the median of four estimates compiled by Bloomberg.

Consumers bought more items from McDonald’s dollar menu and coffee that’s cheaper than Starbucks Corp.’s brew as U.S. companies slashed 533,000 jobs in November, the most in 34 years. Faltering European economies also led to increased purchases of snack-sized sandwiches and chicken wraps.

“People are really responding to McDonald’s value proposition in this tough environment,” Peter Jankovskis, who helps manage $1.1 billion in assets at Oakbrook Investments LLC, said today in a telephone interview. The Lisle, Illinois- based firm owned almost 280,000 McDonald’s shares through September.

Analysts estimated that U.S. comparable-store sales rose 4.6 percent, based on the median of four projected by RBC Capital Markets, Morgan Stanley, Oppenheimer & Co. and Cowen and Co. Europe’s sales may have advanced 4.6 percent on average, they said.

McDonald’s, based in Oak Brook, Illinois, rose 25 cents, to $62.97 at 10:28 a.m. in New York Stock Exchange composite trading. Among the 30 companies in the Dow Jones Industrial Average, its 6.5 percent increase this year before today ranks second behind Wal-Mart Stores Inc. The index has dropped 35 percent.

Asia, Pacific Sales

Comparable sales advanced 13 percent in the region that encompasses Asia, the Pacific, the Middle East and Africa, spurred by gains in Japan and Australia.

Fourth-quarter earnings will be released Jan. 26, said McDonald’s, which has more than 31,000 restaurants.

In the past 2 1/2 years, the company has added a snack- sized chicken wrap, a new chicken biscuit and a reformulated coffee blend to spur breakfast sales and demand by consumers buying snacks between meals.

“As McDonald’s has offered products with greater value to consumers, it’s been a natural driver of traffic in a difficult economic environment,” Chris Scheuer, an analyst at Thrivent Asset Management in Appleton, Wisconsin, said in a Dec. 5 telephone interview. The firm owned 2 million McDonald’s shares among $67.8 billion in assets through September.

Starbucks Prices

A Starbucks Corp. outlet in Greensboro, North Carolina, charges $1.75 for a 16-ounce cup of Pike Place Roast. A nearby McDonald’s sells a similar size of coffee for $1.29.

Higher food prices and declining home values helped push the U.S. economy into a recession last December. European Central Bank President Jean-Claude Trichet said last week the euro region’s economy will shrink next year for the first time since 1993.

The U.S. dollar’s gains against foreign currencies slowed total sales growth to 1.9 percent in November, McDonald’s said. Excluding currency effects, revenue increased 9.6 percent.