LOS ANGELES (AP) — A survey of McDonald's Corp. franchisees suggests the burger chain will report higher-than-expected sales at restaurants open at least a year for the second quarter, translating into higher earnings, an analyst said Monday.
THE OPINION: Janney Capital Markets analyst Mark Kalinowski raised his estimate for sales in June at McDonald's U.S. restaurants open at least a year, citing a survey of 28 franchisees representing 166 restaurants.
The analyst expects sales to increase 7.3 percent, up from an earlier forecast calling for an increase of 2.6 percent.
Kalinowski's June sales forecast also is well ahead of analysts' consensus expectations of 4.1 percent, according to a FactSet survey.
Sales at restaurants open at least a year, also known as same-store sales, is a key figure because it measures growth at existing stores, while excluding those that open and close during the period.
"All in all we continue to believe that McDonald's is generating some of the very best U.S. same-store sales trends out of the top seven burger brands in the country," Kalinowski write in a note to clients.
As the burger chain grabs additional market share, its stock will gradually benefit, he added.
For Europe in June, Kalinowski raised his growth estimates by 1 percent to 4 percent. In the U.S., he expects the figure to rise to 6.2 percent, up from his prior estimate of 2 percent.
Because of the increases, the analyst raised his second quarter earnings per share estimate by 2 cents to $1.29. Analysts expect the company to earn $1.28 per share in the quarter, according to FactSet.
The analyst also raised his earnings per share estimate for the third quarter by a penny to $1.41, and his 2011 estimate by three cents to $5.13 per share.
In addition, Kalinowski increased his 2012 earnings per share estimate by one cent to $5.60.
The analyst has a "Buy" rating on the burger chain.
McDonald's is scheduled to report second-quarter financial results on Friday.
THE STOCK: Shares of the Oak Brook. Ill.-based company slipped 27 cents to $85.21 in afternoon trading on Monday. The stock has traded between $68.59 and $86.46 over the past 12 months.
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