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Sonic announces Q4 prelim comps
September 23, 2008
OKLAHOMA CITY — Sonic Corp. has announced it has achieved 22 consecutive years of positive systemwide same-store sales growth for the fiscal year ended Aug. 31, 2008.
Fourth quarter preliminary comparable sales were down slightly thanks to significantly negative same-store sales for partner drive-ins (drive-ins in which the company owns a majority interest). Franchise drive-in comps were positive for the quarter.
Year-to-date systemwide same-store sales were positive, with estimated franchise drive-in same-store sales slightly below the targeted range of 2 percent to 4 percent, and partner drive-in sales three to four percentage points below franchise drive-in performance.
Increased commodity and labor costs, combined with the impact of lower sales on fixed costs during the third and fourth quarters, resulted in unfavorable restaurant-level margins for fiscal 2008, according to the company. Still, franchisees opened 140 new drive-ins, relocated or rebuilt 65 existing drive-ins, and completed 800 retrofits for the fiscal year.
"The performance of our partner drive-ins has lagged well behind that of our franchisees. As a result, we plan to refine our strategy (over the next four years) by refranchising underperforming partner drive-ins and slowing the growth of partner drive-ins," said Sonic's chairman and chief executive officer Cliff Hudson.
Partner drive-ins comprise of approximately 20 percent of the entire system.
Impact of hurricanes
An estimated 100 partner drive-ins and 336 franchise drive-ins across the Gulf Coast area were closed as a result of hurricanes Gustav and Ike. As of Sept. 23, however, 23 partner drive-ins and 50 franchise drive-ins remained closed. For the first quarter of fiscal 2009, which ends Nov. 30, 2008, store closures are anticipated to negatively affect revenues by approximately 1 percent.
Fourth quarter conference call
Sonic expects to report its fourth quarter and fiscal year-end results after the close of market Oct. 16. The company will provide an online simulcast of its earnings release conference call Oct. 17, beginning at 10 a.m. Eastern time. An online replay of the conference call will be available approximately two hours following the conclusion of the live broadcast and will continue through Nov. 17. A link to these events may be found at the investor section of the company's Web site.
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