McDonald's sales top expectations; Europe stronger

OAK BROOK — McDonald's Corp. reported a 5.3 percent rise in January sales at locations open more than a year, giving credit to its McCafe hot chocolate, Chicken McNuggets and the addition of oatmeal to the menu.

A strong gain in Europe, the fast-food chain's largest region, made up for a relatively weak sales gain the U.S.

That topped the average forecast from analysts of 4 percent, according to FactSet Research.

McDonald's shares rose $2.17, roughly 3 percent, to $75.62 in afternoon trading Tuesday on the news.

The company has outperformed its competitors during the past few years with and expanding menu and an emphasis on low-priced items.

Growth in the U.S., which accounts for 34 percent of the company's revenue, came in weaker than the rest of the world. U.S. sales at stores open at least a year rose 3.1 percent.

However, Europe — accounting for 40 percent of revenue — saw that same figure rise 7 percent. This was well above some analysts' expectations and good news for the fast-food chain as many thought the relatively weaker economies of Europe would take more of a toll on its business there.

The Asia/Pacific, Middle East and Africa regions, making up 21 percent of revenue, climbed 5.2 percent.

Sales at locations open at least a year are an important gauge because it measures revenue from the company's existing restaurants rather than growth from opening new locations.

McDonald's, like many of its peers, is dealing with higher ingredient costs and expects to raise prices this year. The company has already increased prices in some parts of the world, which hasn't yet seemed to dampen demand.