OKLAHOMA CITY — Sonic Corp. has reported that systemwide same-store sales fell 5.4 percent for the third quarter ended May 31 as compared to a decline of 0.4 percent for the same quarter last year, the company has announced.
Same-store sales at partner drive-ins (those in which the company owns a majority interest) declined 7.7 percent in the quarter. Same-store sales at franchise drive-ins were down 4.9 percent. Year to date, systemwide same-store sales were down 4.3 percent as compared to an increase of 1.5 percent in the prior-year period. The decline in systemwide same-store sales reflected 3.7 percent lower same-store sales at franchise drive-ins and a 6.8 percent decline at partner drive-ins.
Revenues for the quarter were down 10 percent to $191.9 million compared to $213 million in the same period last year, reflecting lower restaurant sales at partner drive-ins as well as the impact of refranchising on the company's revenue mix. Year to date, revenues were down 6 percent to $545 million from $577.8 million last year.
Net income for the quarter was down 2.3 percent to $16.8 million compared to $17.2 million in the same period last year. Year to date, net income was down 18.7 percent to $32.6 million compared with $40.1 million last year.
Sales initiatives
"The challenging consumer environment continued to affect our sales performance in the third quarter," said Clifford Hudson, Sonic chairman and CEO. "We continue to strive for greater balance in our menu, emphasizing promotions that will drive traffic, loyalty and check.
Hudson noted the recent refranchising of 177 partner drive-ins was a key accomplishment in the third quarter. The transactions increased the mix of franchised drive-ins to approximately 86 percent of the chain versus 80 percent at the beginning of the fiscal year.
"The speed with which we have been able to implement our refranchising initiative, along with the solid pace of our development in spite of current pressures on the credit markets, reflects the ongoing confidence our franchisees have in our brand," he said. "We believe this change in our business model ultimately will benefit our partner drive-in performance by allowing greater focus on a smaller base, and will benefit our stockholders by reducing the operational and financial risks of our business."
Conference call
A listen-only simulcast of Sonic's third quarter conference call will begin at approximately 4 p.m. Central time (5 p.m. Eastern) and can be accessed at the company's Web site. An on-demand replay, using the same link, will be available at approximately 7 p.m. Central time today and will continue until July 23.
