June 8 (Bloomberg) -- McDonald's Corp. said monthly sales increased the most in three years on a ``Shrek the Third'' movie promotion as well as chicken sandwiches and snack wraps.

McDonald's, the world's largest restaurant company, said May sales at outlets open at least 13 months rose 8.7 percent globally and 7.4 percent in the U.S. Same-store sales in Europe climbed 8.9 percent, the company said today in a statement.

Global sales climbed after McDonald's introduced new versions of the $1.29 chicken snack wrap in the U.S. and started selling the product in Germany. Demand for Happy Meals rose on promotions tied to Dreamworks Animation SKG Inc.'s animated ``Shrek,'' which has generated $289.2 million in worldwide ticket sales since its May 17 debut.

``They're continually introducing new food items, particularly chicken-based items that are very attractive to more health-conscious consumers,'' said Peter Jankovskis, who helps manage $1.3 billion at Oakbrook Investments LLC. ``Tagging onto strong box-office results for `Shrek' is a nice way to boost sales.''

Oakbrook Investments, based in Lisle, Illinois, owns more than 680,000 McDonald's shares.

McDonald's said same-store sales increased 10.2 percent in the region encompassing Asia/Pacific, the Middle East and Africa. The introduction of hot cakes as well as egg-and-bacon McMuffins increased breakfast sales in China; extended restaurant hours helped Australian sales.

Shares Advance

Shares of McDonald's, which operates about 32,000 restaurants in 118 countries, rose the most since September. They climbed $1.20, or 2.4 percent, to $51.41 at 4 p.m. in New York Stock Exchange composite trading.

They stock has advanced 53 percent in the past 12 months, outpacing a gain of 30 percent at Yum! Brands Inc., the owner of Taco Bell and KFC.

McDonald's Chief Executive Officer Jim Skinner told shareholders May 24 that a ``robust pipeline'' of new foods and beverages will extend four years of sales gains.

``McDonald's continues to execute across the globe,'' Larry Miller, an Atlanta-based analyst at RBC Capital Markets Corp., wrote in a note June 6. He rates the shares ``sector perform.''

Miller had expected worldwide comparable-store sales to rise 5 percent, with sales gaining 5 percent in the U.S. and 4 percent in Europe. A year earlier, total sales rose 4.5 percent.

Global sales last month increased the most since a jump of 10.5 percent in April 2004, McDonald's spokeswoman Heidi Barker said. The company is based in Oak Brook, Illinois.

Breakfast, `Shrek'

U.S. sales rose on the introduction of cinnamon rolls and iced coffee. The ``Shrek'' tie-in resulted in a ``significant spike'' in sales on demand for promotional drinking glasses and kids' meals with chicken McNuggets, said Barker.

Demand for chicken sandwiches and a small hamburger called P'tit Plaisir in France drove sales in Europe, McDonald's largest market by revenue. A Cheddar Beef Burger and Deluxe with Bacon burger helped U.K. sales.

The company is testing sweet iced tea and burgers with Angus beef among an increasing number of items that may be introduced in the next two years, U.S. President Don Thompson told reporters after the annual meeting at McDonald's headquarters last month.

Sales growth has accelerated this year on new desserts in Europe and iced lattes in the U.S., where the company is trying to take customers from Starbucks Corp.

Threat to Starbucks

Marc Greenberg, a Deutsche Bank Securities Inc. analyst in New York, reduced his target price for Starbucks shares to $32 from $37 today, saying that positive consumer reaction to McDonald's brew poses a threat to the coffee chain.

Yesterday, Jason West, a Deutsche analyst in Boston, upgraded McDonald's shares to ``buy'' from ``hold'' on its ``expanding beverages opportunity.''

McDonald's now sells more chicken in the U.S. than KFC, Bill Lamar, McDonald's U.S. marketing chief, said May 8. The company had chicken sales of $5.2 billion in the 12 months through March.

``Shrek'' U.S. ticket sales totaled $26.7 million last weekend, making it the third most-popular movie, according to box-office tracker Media By Numbers LLC in Encino, California.

To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina at cburritt@bloomberg.net.

Last Updated: June 8, 2007 16:22 EDT