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"restaurant sales below Q2 levels    * Shares down almost 3 percent    By Lisa Baertlein    July 23 (Reuters) - McDonald's Corp reportedlower-than-expected quarterly profit on Monday, hurt by aweakening global economy and the impact of a stronger dollar,and said sales growth at  established restaurants would slowthis month.        The rare profit miss from the world's biggest hamburgerchain showed the sluggish U.S. economy and Europe's belttightening are pinching even the most resilient restaurantoperators, as diners limit spending for meals away from home.     &amp;quot;We're seeing more markets that are having consumerconfidence issues ... It's a little more than a European cold,if you would,&amp;quot; McDonald's Chief Executive Officer Don Thompsonsaid on a conference call with analysts.     Shares in McDonald's, which has stepped up advertising forits low-priced food to keep customers coming through its doors,fell $2.64, or 2.9 percent, to close at $88.94 on the New YorkStock Exchange. The stock hit all-time highs of over $100earlier this year as it outperformed rivals and consolidatedmarket share.      McDonald's results came days after Chipotle Mexican GrillInc, one of the best-performing restaurant chains,surprised investors by saying the lethargic U.S. recovery hadcooled same-restaurant sales growth, adding to concerns abouthow much consumers were cutting back on discretionary spending.                  &amp;quot;We knew it was going to be a tough quarter going in, and itcertainly was,&amp;quot; Edward Jones analyst Jack Russo said.     &amp;quot;This year is going to be a challenge for the chain. Europe(its biggest market for sales) has slowed down, and the consumerremains pretty frugal,&amp;quot; Russo said.    Closely watched global sales at restaurants open at least 13months decelerated during the month of June -- increasing 4.4percent versus 7.7 percent a year earlier.     Net income fell 4.5 percent to $1.35 billion, or $1.32 pershare, for the second quarter. The impact of the stronger dollar-- which lessens the value of sales overseas for U.S. companies-- cut 7 cents a share from earnings in the latest quarter, thecompany said. Higher taxes and costs related to a large salesmeeting and its Olympics sponsorship also weighed on profits.    Earnings per share missed analysts' average estimate by 5cents, according to Thomson Reuters I/B/E/S. It has been atleast four years since McDonald's earnings missed Wall Street'squarterly EPS estimate, analysts said.     Total revenue edged up to $6.92 billion, from $6.91 billiona year earlier.      Overall sales at established restaurants rose 3.7 percent inthe second quarter, exceeding the 2.9 percent increase expectedby analysts polled by Consensus Metrix.        Advertising helped the company beat sales expectations forEurope in the quarter, when U.S. restaurant margins took a hitas McDonald's competitors put more focus on lower-cost valuemenus, analysts said.    &amp;quot;You are starting to see signs that consumers are spendingless at restaurants,&amp;quot; said Morningstar analyst R.J. Hottovy.&amp;quot;You are also seeing increased competition.&amp;quot;    To that end, McDonald's said it expects same-restaurantsales to rise in July, but less than they did in the secondquarter.    Janna Sampson, co-chief investment officer at OakbrookInvestments in Lisle, Illinois, said McDonald's does not controlcurrency exchange rates or taxes -- which dinged results in thelatest quarter and are expected to be issues in coming months.     &amp;quot;Those two things, coupled with the July guidance, certainlymeans next quarter is going to be tough,&amp;quot; Sampson said.        Same-restaurant sales rose 3.6 percent in the United Statesand 3.8 percent in Europe in the second quarter. Analystsexpected gains of 3.5 percent in the U.S. and 2.4 percent forEurope.    Results were a bit better than expected at 0.9 percent inthe Asia/Pacific, Middle East and Africa region, where Japanweighed on results for the quarter."^^<http://www.w3.org/2001/XMLSchema#string>
<http://in.reuters.com/article/mcdonalds-results-idINL2E8IN80G20120723>