McDonald’s May U.S. sales hurt by high gas prices

NEW YORK (Reuters) – McDonald’s Corp reported a lower-than-expected sales increase at established stores in the United States in May as high gas prices and unemployment crimped its business.

The world’s biggest hamburger chain, whose shares fell 1.8 percent in premarket trading, said sales at U.S. restaurants open at least 13 months rose 2.4 percent. Analysts polled by Thomson Reuters were expecting a 2.8 percent rise.

U.S. sales account for 35 percent of the chain’s business.

“The unemployment report on Friday showed the economy is growing more slowly,” said Matthew DiFrisco, an analyst with Lazard Capital Markets. “We’re looking at a May number that was influenced by higher gasoline prices.”

Globally, same-store sales rose 3.1 percent.

McDonald’s said same-restaurant sales in Europe, where the chain gets about 40 percent of its total sales, also fell short of estimates. They were up 2.3 percent, below the 4.2 percent expected by Wall Street.

Comparable sales were up 4.3 percent in its Asia/Pacific, Middle East and Africa (APMEA) unit, beating the 3.4 percent estimate, according to Thomson Reuters I/B/E/S. McDonald’s said the gains were led by a strong performance in China.

McDonald’s last month said it raised U.S. prices by 1 percent in March and that more price increases were in the works. It said prices in Europe were up by the same amount and that it planned to raise prices in China.

The company has said it expects food costs to rise by 4 percent to 4.5 percent in the United States and Europe this year.

The company’s Dollar Menu and other “value” offerings have resonated with consumers around the world who are coping with elevated unemployment rates and rising costs for groceries and fuel.

McDonald’s shares fell $1.49 to $79.65 in premarket trading. (Reporting by Phil Wahba, additional reporting by Lisa Baertlein, editing by Gerald E. McCormick and John Wallace)