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McDonald's Emerges as King of Salads

The company posts strong second-quarter sales, and the stock jumps.

Selling salads at its hamburger restaurants seems to be panning out for


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The company said May systemwide sales rose 12%, helped by sales of its Premium Salads. Same-store sales grew 2.2% in constant currencies. Along with an upgrade from CIBC World Markets, the stock jumped in early afternoon trading.

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Recently, shares of McDonald's were up 9%, or $1.71, to $20.99 on the news.

Total sales in May were $3.9 billion, the company said. U.S. same-store sales rose 6.3%, driven in part by Happy Meal offerings. Europe's same-store sales, however, fell 1%.

Saying a third-quarter turning point is approaching for the company, CIBC World Markets upgraded McDonald's to sector performer from sector underperformer. The firm believes May same-store sales results are encouraging for the company after more than a year of negative comps. CIBC estimates that the new salads can add between 1% to 2% to future comparable sales.

Looking to the third quarter, CIBC sees comps in the U.S. and Europe easing in July and remaining so for the rest of the year.

Separately, the company said it will take pretax costs of $50 million in the second quarter related to its ongoing restructuring plan.