McDonald's Sees Q2 Profit Up 27 Percent

McDonald's Corp. (MCD) Wednesday said second-quarter profit will beat expectations, as the introduction of entree salads in Europe and a music download promotion in the United States helped power the best second-quarter sales growth since 1987.

McDonald's shares, which rose 4 percent on Wednesday morning, were among the few upward movers in the Dow Jones industrial average (search) early on.

The world's largest fast-food company said earnings in the quarter will be about 47 cents per share, based on preliminary results. Analysts on average expected 44 cents, according to Reuters Estimates

Driven by sales growth in every segment of its global business, second-quarter sales at restaurants open at least 13 months, or same-store sales, were up 7.8 percent, the best second-quarter increase since 1987.

While same-store sales were up, the growth rate, especially in the United States, is slowing from earlier in the year as the company and the entire fast food sector start to face tougher comparisons to a year ago.

"They were running mid-teens or low teens. Now they are running half that," said Dean Haskell, an analyst at JMP Securities.

McDonald's said June same-store sales rose 5.6 percent globally.

U.S. same-store sales, a key measure of retail health, rose 6.6 percent in June, while those in Europe, the company's No. 2 market, rose 3.6 percent.

The company said year-over-year sales comparisons will become more difficult in the second half of this year.

McDonald's said it will report second-quarter results on July 22.