February comparable sales in the U.S. increased 2.8 percent due to the strength of the chicken line-up, the core menu, particularly the Quarter Pounder, beverages, and breakfast. U.S. results for February reflect about 4 percentage points of negative impact due to the leap year in 2008.
In Europe, comparable sales decreased 0.2 percent for the month, reflecting a negative calendar shift of about 4.2 percentage points due to leap year. Excluding this calendar shift, comparable sales increased 4.0 percent as Europe's unique premium menu offerings and compelling value contributed to sales growth, led by the U.K. and Russia, partly offset by Germany.
In Asia/Pacific, Middle East, and Africa, February comparable sales increased 0.7 percent, reflecting a negative calendar shift of approximately 3.4 percentage points due to leap year. Excluding this impact, the segment's comparable sales were up 4.1 percent driven by strong results in Australia and Japan, partly offset by China. China's weak February comparable sales were due in part to the celebration of Chinese New Year in January 2009 versus February in 2008.
External factors including unprecedented volatility in foreign currency exchange rates and commodity costs will continue to pressure revenue and margin comparisons in the first quarter. Weaker foreign currencies, including a significant decline in the Eastern European currencies where McDonald's primarily operates Company-owned restaurants, are expected to negatively impact results. If foreign currency rates remain at current levels, currency translation is expected to negatively impact first quarter revenues by at least $600 million and earnings by $0.07 to $0.09 per share. In addition, as previously stated, commodity cost pressures are expected to have a greater impact during the first half of the year.
First quarter 2009 results will include an after-tax nonoperating gain of about $0.03 to $0.04 per share resulting from the sale of McDonald's minority interest in Redbox Automated Retail, the company's last non-McDonald's venture. McDonald's effective tax rate for the first quarter is expected to be 28 percent to 29 percent, and the Company's annual tax rate is expected to be 29 percent to 31 percent.
The five times weekly e-newsletter that keeps you up-to-date on the latest industry news and additions to this website.