McDonald's Corp. (MCD) second-quarter was held back on weak June sales, even as the company met earnings expectations with an 8% decline due to unfavorable exchange rates and a prior-year sales gain.

Fast-food demand has been slowing in the U.S. as unemployment takes a toll and falling grocery-store prices provide a stronger incentive to eat at home. McDonald's, while gaining market share from competitors like Burger King Holdings Inc. (BKC) and Wendy's/Arby's Group Inc. (WEN), felt the pinch too, as its June global same-store sales increase of 2.6%, including a 1.8% rise in the U.S., was below expectations.

McDonald's shares fell 3.83% in early trading to $56.57.

McDonald's remained confident in its full-year outlook, and the world's largest hamburger chain expects July sales to be similar to or better than June figures.

Consumers continue to hunt out lower prices for meals when they do go out to eat, which leave McDonald's in a good position with its low prices. McDonald's, however, has also focused on rolling out higher-priced products in the recent quarter, most notably promoting its premium coffee products heavily. It also introduced its $4 Angus Burger in the quarter. Such items may have drawn some attention from its value products, leading to weaker sales.

"McCafe is a long-term home run for them, but given the high price of some items, it might not provide that sales jolt," Telsey Advisory Group restaurant analyst Tom Forte said. "Given the prolonged recession, some of these higher items may not be ideal."

McDonald's second-quarter profit came in at $1.09 billion or 98 cents a share, including a one cent benefit from an asset sale, down from $1.19 billion, or 1.04 a share, a year earlier.

Revenue decreased 7% to $5.65 billion, though it was up 4% on a constant-currency basis.

Analysts had been looking for earnings of 97 cents a share on $5.72 billion in sales.

For the quarter, McDonald's posted global same-store sales rising 4.8%, with a 3.5% gain in the U.S. on strong sales of classics like the Big Mac as well as value drinks like $1 sweet tea.

Same-store sales rose 6.9% in Europe, with strong results in the U.K., France and Russia. Same-store sales in the Asia/Pacific, Middle East and Africa region rose 4.4%, bolstered by strength in Australia.

McDonald's expects a lighter grocery bill for the remainder of the year, as falling commodity prices offer a relief. The company said that its ingredient costs are expected to rise 3% to 3.5% in the U.S. and Europe, compared to increases of up to 5.5% in the U.S. and 4.5% in Europe the company forecast last quarter.

-By Paul Ziobro, Dow Jones Newswires; 212-416-2194; paul.ziobro@dowjones.com

(Tess Stynes contributed to this report.)