Sonic Posts Jump in Profit, Raises Outlook
30 March 2016 - 8:40AM
Dow Jones News
Sonic Corp.'s second-quarter profit rose 41% on continued strong
sales at the drive-in fast-food chain.
Shares, up 1.5% over the past 12 months, rose 3.5% in
after-hours trading to $33.70 as results beat Wall Street's
consensus and the company raised its earnings outlook.
Sonic said strength in core menu items, along with limited-time
offers, drive results in the quarter and helped the chain gain
market share.
The company now expects earnings, excluding one-time items, to
increase 20% to 25% for the fiscal year ending in August, up from
16% to 20%. Sonic said it expects same-store sales to climb between
4% and 6%, up from a previous forecast of 2% to 4%.
For the period ended Feb. 29, Sonic reported a profit of $10.8
million, or 22 cents a share, up from $7.7 million, or 14 cents a
share, a year earlier. Excluding items, earnings rose to 18 cents a
share from 13 cents a year earlier.
Revenue rose 5.5% to $133.2 million.
Analysts had projected earnings of 16 cents a share on $128
million in revenue.
Sales at restaurants open for at least 15 months rose 6.5% for
the period, compared with 11.5% in the year-ago period.
The company had 8.5% fewer shares outstanding in the latest
period from a year earlier. Sonic has said it plans to buy back
$126 million worth of stock this fiscal year.
The restaurant chain started in 1953 in Shawnee, Okla., as a
hamburger and root beer stand. It revolutionized the ordering
process by installing curbside speakers that allowed customers to
place orders without leaving their cars, spawning the slogan:
"Service at the Speed of Sound." The company changed its name from
Top Hat to Sonic Drive-In in 1959.
Now based in Oklahoma City, Sonic has more than 3,500
restaurants styled after '50s drive-ins, including some carhops who
deliver orders on roller skates.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
March 29, 2016 17:25 ET (21:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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