McDonald’s sales growth slows in August

CHICAGO — McDonald’s Corp., the world’s largest fast-food chain, said Wednesday that its monthly sales growth began to lose steam in August, partly because it was measuring against a massive increase a year ago.

Deal-seeking customers have flocked to McDonald’s low-priced menu for the past year and the recession has marched on, which has helped propel the burger chain while more expensive sit-down restaurants have struggled.

But in August, McDonald’s sales in established restaurants rose 2.2 percent globally. The softer increase shows that the company has in part become a victim of its own success, as it compares sales figures with the same period last year when results climbed 8.5 percent.

It was the company’s smallest monthly gain since February.

Shares fell $1.13, or 2 percent, to $55.09 in trading Wednesday, though some analysts looked on the results as relatively good news.

“These guys were one of the primary beneficiaries of the economic downturn,” said Morningstar analyst R.J. Hottovy. “As things gradually start to improve, you’re going to be overlapping some difficult comparisons. The fact that it’s positive, I’m encouraged by it.”

McDonald’s also faces pressure from rising unemployment in the U.S., which keeps customers away during the company’s breakfast and lunch hours.

It’s also fending off increased competition from other restaurant chains, which are trying to lure in customers by deeply discounting their own dishes. Among them, an effort by Burger King Corp. to promote $1 sandwiches, including a double cheeseburger already available in 40 markets across the country, and Popeyes’ five-piece chicken dish that sells for $2.99.

The world’s largest fast-food chain said sales at restaurants open at least 13 months, a key measurement that adjusts for the effects of expansion, rose a weak 1.7 percent in the U.S. and 3.5 percent in Europe. In the Asia Pacific, Middle East and Africa regions, the figure fell 0.5 percent.

The last time systemwide comparable sales were so low was in February, when the company said they rose 1.4 percent, without being adjusted for a calendar shift. The figure grew 4.3 percent in July.

Stifel Nicolaus & Co. analyst Steve West told investors that the August results were worse than anticipated, but he expected further benefits in foreign exchange rates would help McDonald’s overcome any weakness in the monthly metric.

“We continue to have a positive outlook for continued momentum and industry-leading fundamentals,” he wrote in a research note Wednesday.

In the U.S., the Oak Brook-based restaurant chain’s newly launched Angus Third Pounders and McCafe espresso-based coffees were among its top sellers, the company said.

Total sales rose 1.1 percent, including a 2.6 percent gain in the U.S., a 3 percent drop in Europe and a 6.1 percent rise in Asia Pacific, the Middle East and Africa.

Year-to-date, sales at restaurants open at least 13 months rose 4.2 percent while total sales fell nearly 1 percent.

AP Retail Writer Mae Anderson contributed to this report from New York.