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Sonic's Q3 net income down, outlook hopeful
June 24, 2008
OKLAHOMA CITY — System-wide sales at Sonic Corp.declined 0.4 percent for the third quarter ended May 31, 2008, the company announced. For the first nine months of fiscal 2008, system-wide same-store sales rose 1.5 percent.
Same-store sales fell significantly in March, the company said, primarily due to cold weather compared with March 2007.
Revenues for the third fiscal quarter rose 1 percent to $213 million from $209.9 million in the year-earlier period. This increase was attributable to new unit growth and higher franchising income. For the first nine months of the fiscal year, revenues increased 6 percent to $577.8 million from $546.2 million in the same period last year.
Net income for the third quarter was $17.2 million down from $20.6 million for last year's third quarter. Year-to-date net income was $40.1 million, down from $42.2 million for the first nine months of 2007.
The company is placing a renewed focus on customer service and implementing a more strategic approach to pricing, Sonic officials said, which is expected to have a positive impact on sales. Summer promotions will be built around product news, such as the return of the Island Fire Burger, along with new frozen treats. The company will continue to focus on value messaging, including 99 cent shakes and Happy Hour, which features half-priced drinks from 2 p.m. to 4 p.m. every day.
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