030727 McDonald's June Sales Driven by SaladsJuly 15, 2003Chicago - McDonald's Corp. said that June sales at restaurants open more than 13 months rose 2.1%, boosted by its new line of salads and summer promotions of its kids-oriented Happy Meals. The company also said it expected profit of 37 cents a share for the second quarter, matching the average analyst estimate posted by Reuters. The profit outlook includes $50 million in costs for revamping the business as well as $18 million less in gains from sales of franchises compared with the year before. The Oak Brook, Illinois-based company said total sales at its more than 30,000 hamburger outlets rose 11% in June to $3.9 billion. Sales rose 10% to $11.5 billion in the second quarter. McDonald's recently launched entree salads with Newman's own salad dressing. It has also begun selling McGriddles breakfast sandwiches, which combine pancakes, syrup and filling like sausage and eggs. The results follow a 2.2% same-store sales increase in May, when U.S. stores posted a surprising 6.3% rise. U.S. same-store sales rose 7% in June and 4.9% for the quarter. European same-store sales fell 2.2% in June and 1.8% in the quarter. "McDonald's has been enjoying a perfect storm of positive incrementals for sales," John Glass, analyst at CIBC World Markets, which has a "sector perform" rating on the stock, said. "Service has probably gotten better, too. You can't do 7% in (U.S. same-store) sales without service getting better." Still, McDonald's shares were down 27 cents, or 1%, at $22.31 in morning trade on the New York Stock Exchange. "Europe is still in the doldrums," Glass said as a reason for the stock move.
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