News

Sonic Q1 results reflecting overall industry malaise

January 5, 2017

Sonic's first fiscal quarter results for the period ending Nov. 30, 2016, reflect the sluggishness being felt across the restaurant industry with sales down and margins declining, according to a news release. The largest U.S. drive-in chain reported the following for the first quarter of FY 2017:

•    17 percent net income per diluted share increase to 28 cents, compared with 24 cents for the same period in the previous year.
•    Flat adjusted net income per diluted share from same period of the prior year, at 24 cents. 
•    2 percent drop in system same-store sales, with 2 percent decrease for franchise sites and 2.4 percent decrease at company-owned drive-ins. 
•    150 basis point decline in drive-in margins. 
•    14 new franchise drive-ins and 56 refranchised sites opened.
•    2 million outstanding shares repurchased by company.

"Our first quarter results reflect a sluggish consumer landscape and exceptionally strong prior-year performance," Sonic CEO Cliff Hudson, said in a news release. "Although the business faces even tougher sales and margin hurdles in the second fiscal quarter, we remain optimistic in our ability to show sequential same-store sales and profitability improvement beginning in the second half of fiscal 2017. We … remain confident that we will complete our targeted refranchising transactions prior to the end of the third fiscal quarter, leaving us with a more efficient, higher-margin portfolio of company-owned stores."

First fiscal quarter of 2017 net income totaled $13.1 million compared to $12.5 million net income in the same period of the prior year, according to a news release.