Sonic 1Q net income up, sales down
January 5, 2011
by Bryan Salvage
OKLAHOMA CITY – Sonic Corp. (NASDAQ: SONC), the nation's largest chain of drive-in restaurants, announced for its first fiscal quarter ended Nov. 30 net income totaled $7.2 million or $0.12 per diluted share compared with $6.2 million or $0.10 per diluted share in the year-earlier quarter. Revenues declined 5% to $129.1 million from $136.5 million in the year-earlier period primarily because of refranchising 16 drive-ins since the year-earlier period and lower same-store sales.
System-wide same-store sales declined 2.4% during the first quarter, improving from a decline of 6.4% in the fourth quarter of fiscal 2010. Same-store sales at franchise drive-ins declined 2.5% in the first quarter, while same-store sales at company-owned drive-ins declined 1.9%, and franchise drive-in openings totaled nine for the quarter.
"We are pleased by improvements in Sonic's same-store sales trends, especially the continued strengthening of company-owned drive-in sales that began at the end of last fiscal year," said Clifford Hudson, chairman and CEO. "These improvements underscore the positive impact of our strategic initiatives, including a greater emphasis on personalized service with skating Carhops and the introduction of premium-quality ingredients and products, like real ice cream, Footlong Quarter Pound Coneys and a line-up of bigger burgers – all of which continue to drive higher customer satisfaction scores.
Sonic operates more than 3,500 drive-ins coast to coast feeding approximately 3 million customers every day.