McDonald's eats rivals' lunch

Los Angeles - McDonald's Corp is putting more distance between itself and many fast-food rivals as smoothies and its breakfast Dollar Menu have lured more diners into its US restaurants.

Sales at established restaurants also recovered in Europe, its top market for revenue, after an August decline in France disappointed investors.

The world's largest hamburger chain reported September sales at established restaurants far above Wall Street's expectations and forecast a jump in October that would also outpace analysts' targets.

Prices for beef and other key ingredients are rising, but Chief Financial Officer Pete Bensen said on a conference call that McDonald's could easily cope with those increases and push through some menu price increases next year.

Shares of the company, which also posted a stronger-than-expected quarterly profit, were up almost 2% at $78.82 after hitting an all-time high of $79.48.

"McDonald's is full-steam ahead, and they'll continue to take market share domestically and on an international basis," said Telsey Advisory Group analyst Pete Saleh.

McDonald's has been stealing US market share from rivals like No. 2 hamburger chain Burger King, which is now private after its sale this week to 3G Capital.

Saleh expects those market share gains to accelerate as Burger King's new owners study the business and put together a strategic plan.

McDonald's shares hit a session high of $79.48 and were up 1.8% at $78.84 in afternoon New York Stock Exchange trading. The stock hit its previous high of $78.14 on Wednesday.

While McDonald's leads rival Yum Brands in the United States, it is playing catch-up to the parent of KFC and Pizza Hut in China, which is posting the fastest economic growth of any major global economy.

Most of Yum's nearly 3 700 China restaurants are KFC. Yum has more than twice as many restaurants in China as McDonald's.