Sonic Corp. (NASDAQ: SONC)
Shares of Sonic Corp. were trading $2.88, or 8.08% lower at $32.75 in premarket trading on Wednesday, after the fast-food company reported its fiscal third-quarter results.
The company revealed a revenue figure that was below Wall Street expectations. Sonic also lowered its full year earnings per share guidance, sending its shares on a fall.
However, the company toppled analyst expectations on earnings, after posting a net income of $21.6 million for the three months ending May 31. Sonic shares have gained 30% year-to-date.
SONC Earnings & Outlook
The company had a net income of $21.6 million, or $0.58 per share, up 32% from $18.8 million, or $0.44 per share, in last year’s comparable quarter.
Adjusted for one-time items, the company had earnings per share of $0.52 during the quarter. Total revenue dropped to $118.3 million from the year-ago figure of $124 million.
Analysts were expecting adjusted earnings of $0.49 per share on sales of $118.9 million, according to Thompson Reuters data.
For full year, the company lowered the high end of its adjusted earnings per share guidance to between $1.45 and $1.49, from its earlier guidance of $1.43 to $1.50. Analysts polled by Thompson Reuters forecast adjusted earnings of $1.47 on a revenue of $429.7 million.
Sonic CEO Comments
Sonic Corp. Chief Executive Officer Cliff Hudson said, “Our third quarter same-store sales performance reflects a material improvement in trend, driven by ongoing initiatives to increase marketing reach, refresh our advertising creative and introduce relevant new products, including the Sonic Signature Slinger and Pretzel Twist. We continued to support a simplified everyday value message via the Carhop Classic promotion in April and May, which featured a Quarter-Pound Double Cheeseburger or Signature Slinger and Tots for $2.99. These broadly appealing value options offer compelling price points and are key to our efforts to drive traffic and increase sales.”
Hudson continued, “Looking ahead, we expect to continue to benefit from fully integrated media strategies and strong product innovation. On the product front, we are now promoting new Chicken Tenders as part of a $3.99 Crispy Tender Dinner, as well as Snow Cone Slushes featuring innovative flavors such as Pickle Juice and Tiger’s Blood. We continue to roll out mobile order ahead technology across the system following a successful operational test in the third fiscal quarter. We expect our focus on delighting our guests and delivering a more convenient and personalized experience will continue to drive improved traffic, accelerate operating profit growth and generate strong free cash flow.”
Sonic Corp. Company Profile
Sonic Corp. is involved in the operation and franchising of a chain of drive-thru restaurants in the U.S. Some of the food items offered by the company include ice cream desserts, cherry limeades, slushes, made-to-order hamburgers and chicken sandwiches, hand-made onion rings tater tots and beef hot dogs.
The company, together with its subsidiaries, operated a total of 3,592 Sonic Drive-Ins across 45 states, as of August 15, 2017.
It also owns and leases some of its properties to franchises and third parties. Sonic Corp. was founded in 1953 by Troy N. Smith. Its headquarters are located in Oklahoma City, Oklahoma. –Reuters
