McDonald investors expect small gains

McDonald's Corp. may report a bit of a bounce in U.S. February sales after a slow turn of the year, but the twin challenges of higher food costs and a slumping domestic economy will keep improvement modest, analysts and investors say.

The Oak Brook-based hamburger chain is due to report global same-store sales Monday morning and company watchers hope improved U.S. results will put an end to speculation that previous softness, in December particularly, had more to do with the economy than weather.

Analysts and investors are looking for U.S. sales growth of anywhere from 1 percent to more than 4 percent from a year ago, excluding the Leap Year impact, which added a day of sales.

"I don't necessarily think the U.S. is going to be weak, but I don't think we're going to get knocked over with a big number," said Scott Rothbort, president and founder of LakeView Asset Management in New Jersey.

Deutsche Bank Securities analysts are targeting same-store sales growth of 1.5 percent in the U.S., 5 percent for Europe and 5 percent for the combined Asia/Pacific, Middle East and Africa regions. Their forecast excludes the Leap Year impact, which is expected to boost results by about 4 percentage points.

Other analysts are more bullish. UBS Securities analyst David Palmer is eyeing U.S. February same-store sales growth of 8 percent, including a roughly 4 percentage point Leap Year lift and improving fast-food trends.

Because of their focus on value, McDonald's and its fast-food peers are considered more recession resilient than so-called casual restaurants that have suffered traffic declines for two years or more.