McDonald's Corp., the world's largest restaurant chain, said February sales increased 4.7 percent as a new $3.29 spicy-chicken sandwich and longer hours spurred U.S. gains.

Sales at U.S. restaurants open at least 13 months rose 3.6 percent from a year earlier, Oak Brook, Illinois-based McDonald's said today in a PR Newswire statement. Same-store sales in Europe grew 5.4 percent after falling a month earlier.

Chief Executive Officer Jim Skinner debuted the spicy- chicken sandwich, the first of three new premium products McDonald's plans to roll out through May. The company has taken sales from Burger King Holdings Inc. with almost three straight years of higher U.S. comparable-store sales gains.

``They are pushing new products through the pipeline,'' said Jeffrey Malcom, who helps Towson, Maryland-based Horan Capital Management LLC manage $200 million including 166,000 McDonald's shares. Europe ``is a bit of a slower story.''

Shares of McDonald's, which operates 31,900 restaurants, fell 3 cents to $34.64 yesterday in New York Stock Exchange composite trading. The stock has increased 2.7 percent this year after a gain of 5.2 percent in 2005, the worst performance since 2002.

Miami-based Burger King, the second-biggest U.S. hamburger chain, last week cut the price of the Whopper Jr. to $1 and added the sandwich to a new discount menu. McDonald's debuted a dollar menu in 2002 and subsequently added premium lines of sandwiches and salads, leading to higher global comparable-store sales in every month since April 2003.

Spicy Chicken Sandwiches

Skinner, 61, started selling spicy chicken sandwiches in late January, after debuting three varieties of premium-chicken sandwiches in August and $2.99 fruit-and-walnut salads in May. McDonald's rolled out a stronger coffee blend in late February and plans to add Asian chicken salad in May.

``The business was driven by the new spicy premium chicken sandwich, continued strength from core items and from extended hours,'' Prudential Equity Group LLC analyst Larry Miller in Atlanta wrote March 2. Miller, who rates McDonald's as ``overweight,'' lifted 2006 earnings per share by 1 cent to $2.20.

In June, the company increased to 4,000 from 2,500 the number of U.S. restaurants open 24 hours by offering temporary rent discounts to operators. It had 13,727 U.S. restaurants at the end of 2005.

Europe

Sales in Europe, the chain's second-biggest market, rose after falling 0.5 percent in January, the first decline in eight months. They dropped 3.4 percent in February 2005 amid high unemployment. Germany's joblessness rate is 11.3 percent, the highest in Western Europe.

McDonald's last month promoted toasted deli sandwiches and distributed coupons in the U.K., according to CIBC World Markets Corp. analyst John Glass in Boston. He rates the shares as ``sector outperform.''

The company spent more on advertising in U.K. last year to try to improve its image among consumers who view its food as not healthful, Denis Hennequin, president of McDonald's Europe, said on an analysts' conference call on Oct. 20.

``They have issues, especially in the U.K., with what seems to be a national upheaval over questions of obesity and diet, and overall safety of the food supply,'' said David Kolpak, who helps manage $56 billion, including 4.4 million McDonald's shares, at Cleveland-based Victory Capital Management Inc. ``McDonald's seems to be a magnet for all of this attention.''

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