rose Tuesday after the fast-food giant cooked up a fifth-straight month of U.S. same-store sales gains.
McDonald's said sales in the U.S. -- its biggest market -- were up 8.8% in August. "In the U.S., we're becoming more relevant to more customers by offering better-tasting food, more convenient hours, enhanced service and, as always, good value," said chief executive Jim Cantalupo in a statement.
Worldwide sales rose 3.8% on a constant currency basis. Sales increased 1% in Europe, where the restaurant operator said it had positive performance in several markets, including France and Germany.
Analysts applauded the results, noting that McDonald's has been successful on many fronts.
"The recent same-store sales strength has proven to be a function of more than just premium salads and McGriddles as core menu items
Big Mac and chicken sandwiches are seeing sales jump, and operations are improving," said John Glass, an analyst at CIBC World Markets, in a research note.
Elsewhere, John Ivankoe, an analyst at J.P. Morgan, raised his third-quarter U.S. same-store sales outlook to 8% from 6.5%, assuming 5% comparable sales in September.
After months of sagging sales, McDonald's launched a major turnaround program his year. The company brought in a new CEO, company veteran Jim Cantalupo, revamped its menu to include healthier and more exciting items, and set plans to clean up its stores and provide better service.
The efforts paid off for investors, who have bid the stock up 80% so far this year. But looking ahead, there is some worry that McDonald's will be able to maintain current sales trends.
Ivankoe said 2003 has been an "exceptional year," but that 2004 comps present a "difficult encore." The analyst said he would not buy shares right now, and has an underweight rating on the stock.
"Despite impressive recent success, we are skeptical the sales-driven profit turnaround in the U.S. and profit gains in Europe will meaningfully exceed expectations in 2004," he said in a note. "Such conviction is necessary to buy the stock at current levels, as significant multiple expansion is unlikely."
For the moment, Wall Street did not seem too concerned. The stock was gaining 45 cents, or 2%, to $23.80.