McDonald's profit slips amid slow sales

McDonald's said Tuesday that its first-quarter sales at its U.S. restaurants fell 1.7% and profits fell to $1.2 billion, or $1.21 per share. Analysts expected $1.24 per share.

The company blamed "challenging industry dynamics" as well as severe winter weather for the stumble. In Europe, sales grew 1.4%, and operating grew 6%. Positive sales performance in the U.K., France and Russia was partially offset by ongoing weakness in Germany, the company said.

CEO Don Thompson said that April's global comparable sales are expected to be modestly positive.

"The negatives were the value of the dollar and record food costs," says Jack Russo, analyst at Edward Jones. A rising dollar reduces the value of earnings from foreign countries.

Edward Jones has a buy rating on the stock, mainly because of its healthy dividend yield (3.20%) an improving U.S. economy, and growing international sales. "That's where the growth takes place," Russo says.

Shares fell 0.4% to $99.32.