April 22, 2009 / 3:04 PM / in 9 years

WRAPUP 2-McDonald's profit rises even as consumers cut back

* McDonald’s Q1 EPS 83 cents excl items vs view 82 cents

* McDonald’s worldwide same-store sales up 4.3 percent

* P.F. Chang’s Q1 EPS 56 cents; Wall St view 33 cents

* McDonald’s shares down 1.4 pct; P.F. Chang’s up 25 pct (Adds comments, details on market share and China; previous dateline NEW YORK/LOS ANGELES)

By Lisa Baertlein

LOS ANGELES, April 22 (Reuters) - McDonald’s Corp (MCD.N) posted a higher profit on Wednesday and said April sales at established restaurants are doing as well as or better than their 4.3 percent uptick in the first quarter despite the ongoing recession.

Still, the results largely matched investor expectations, said Oppenheimer restaurant analyst Matthew DiFrisco.

McDonald’s “was exceeding expectations through much of the last two years so it will be interesting to see how the market reacts,” he said.

McDonald’s shares were off 1.4 percent to $54.87 in early afternoon trading.

Fast-food king McDonald’s is one of the few restaurant chains with positive sales news. Costlier casual dining chains are slashing costs to protect profits from tumbling same-store sales.

On Wednesday, P.F. Chang’s China Bistro Inc PFCB.O said its first-quarter net income jumped 38.3 percent to $13.3 million, or 56 cents per share -- handily topping Wall Street’s target. It also raised its full-year view, helped by cost controls.

The higher profit came despite a 6.6 percent drop in sales at established P.F. Chang’s eateries and a 2.2 percent fall in same-store sales at the company’s smaller Pei Wei chain.

On Tuesday, Chili’s Grill & Bar parent Brinker International Inc’s EAT.N profit showed that cost controls offset declining same-store sales.[ID:nN21409277]

“I think a longer-term investor would like to see stability or a reversal of the traffic trends or negative comps,” DiFrisco said of Brinker and P.F. Chang‘s.

Still, P.F. Chang’s stock jumped 25 percent, while Brinker shares were up 7.8 percent.

“The casual dining numbers we’re seeing aren’t good numbers; they’re just less bad,” said Stifel, Nicolaus & Co analyst Steve West. “Less bad is the new good.”

Yum Brands Inc YUM.N -- parent of the Taco Bell, KFC and Pizza Hut fast-food chains -- and Chipotle Mexican Grill Inc CMG.N are scheduled to report results after Wednesday’s closing bell. Yum’s shares were unchanged while Chipotle’s stock rose 6 percent.

MCDONALD‘S SAYS GOBBLING SHARE

McDonald’s first-quarter profit rose 3.5 percent to $979.5 million, or 87 cents per share. Excluding a gain from the sale of its interest in Redbox Automated Retail LLC, McDonald’s earned 83 cents per share, topping analysts’ average estimate by a penny, according to Reuters Estimates.

The stronger U.S. dollar, which lowers the value of overseas sales, cut earnings by 8 cents per share.

McDonald’s and some other fast-food restaurants have benefited as a global economic downturn has sent customers to lower-priced fare, including the company’s Dollar Menu items.

“We grew market share in every major country” during the quarter, McDonald’s Chief Operating Officer Ralph Alvarez said on a conference call with investors.

Sales at restaurants open at least 13 months rose 4.3 percent globally. U.S. results were boosted by strong demand for chicken, breakfast items and drinks, McDonald’s said.

The hamburger chain has McCafe coffee stations in 10,000 U.S. locations and will complete the introduction in the middle of the year, Chief Executive Jim Skinner said on the call.

In Europe, results were strongest in Britain, France and Russia. Strong sales performance in Australia and Japan helped offset softening in China in the company’s Asia/Pacific, Middle East and Africa markets.

Stifel’s West said McDonald’s same-store sales fell in China in both February and March.

The company now plans to open roughly 150 new restaurants in China this year, down from a plan for 175.

McDonald’s China weakness weighed on shares of Yum, which has a significantly bigger presence there than McDonald‘s. (Additional reporting by Nicole Maestri in New York; Editing by Dave Zimmerman and Gerald E. McCormick)

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