McDonald's Corp. (MCD) is winning new customers and keeping existing ones with a focus on classic products like Quarter Pounders and Chicken McNuggets, helping the chain drive first-quarter sales growth and narrowly top analyst expectations despite a big hit from unfavorable foreign exchange rates.

The world's largest hamburger chain says its tiered-pricing strategy with value-, mid- and premium-priced products is helping McDonald's pick up share in all markets. Same-store sales rose 4.3% across the globe, including increases of 4.7% in the U.S., 3.2% in Europe and 5.5% in the Asia/Pacific, Middle East and Africa region.

But some pockets of weakness remain in countries like Germany and China, as the global economic slowdown takes a toll on consumer spending. McDonald's said that April sales trends were as good or better in all of its regions compared to the first-quarter.

While McDonald's gains market share, there are signs that fast-food chains are fighting over a smaller pie. Customer traffic fell 1% at quick-service restaurants this past winter, according to NPD Group, the first seasonal decline since 2003. Morgan Stanley earlier this week suggested that the fast-food industry is becoming a "zero sum industry" as companies battle for the same pool of customers.

McDonald's, with an unmatched advertising machine, could stand to benefit in that tug-of-war for consumer dollars, even as competitors increase their discounts and giveaways. In an earnings call with analysts, McDonald's Chief Executive Jim Skinner said the company would hold firm to its pricing strategy, even if competitors use declining food prices to offer better deals at their stores.

"I don't see us dictating any change in strategy around that," Skinner said.

The company is continuing its push into the speciality coffee category, where it has added McCafe at about 10,000 stores and is on track to complete its U.S. rollout in the next two months. Sales of its beverages could pick up steam once a national ad campaign launches in the coming weeks, and analysts are suggesting that McDonald's could pick up significant sales from the likes of Starbucks Corp. (SBUX)

Earlier, McDonald's said it earned $979.5 million, or 87 cents a share, in the first quarter, up from $946.1 million, or 81 cents a share, in the year-earlier period. The latest results included a 4 cents a share gain from the gain on the sale of the company's minority interest in Redbox Automated Retail, putting the results a penny ahead of consensus estimates of 82 cents a share.

The narrow beat was a contrast to prior quarters, where the company's handily topped estimates, which may indicate McDonald's settling into a steadier growth track.

"There are lots of companies in consumer-land that would love to have McDonald's numbers today," Edward Jones analyst Jack Russo said.

Currency translation hit quarterly earnings by 8 cents a share. McDonald's added that if exchange rates stay roughly where they are, the annual impact will be 32 cents a share.

Shares rose 52 cents, or 1%, in recent trading, to $56.16. The broader market rose as well, with the Dow Jones Industrial Average up 0.6% and the S&P 500 rising 0.9%.

McDonald's, the only Dow Jones component other than Wal-Mart Stores Inc. (WMT) to see shares rise in 2008, is down about 10% so far this year, as investors develop a greater appetite for risk and move into beaten down names.

In the restaurant space, shares of casual dining names are rising on expectations that tighter cost controls will help chains top earnings estimates. P.F. Chang's China Bistro Inc. (PFCB) on Wednesday reported first-quarter earnings well ahead of consensus estimates on lower costs despite still declining sales, pushing shares up 22.3% in recent trading.

Still, many view McDonald's as a more stable consumer name since it is still posting solid sales increases and winning over customers from competitors. Sit-down restaurants are seeing the opposite take place, as they are shedding both customers and sales.

-By Paul Ziobro, Dow Jones Newswires; 201-938-2046; paul.ziobro@dowjones.com