Shares of Sonic Corp. (SONC) are getting a lift in extended trading on Monday after the drive-in restaurant operator matched analyst predictions by doubling its second quarter profit versus the year prior, although revenues came up short of a year ago and expectations.
In the second fiscal quarter ended February 28, Oklahoma City-based Sonic reported total revenue of $111.14 million, down from $115.09 million in the second quarter last year. Net income totaled $3.6 million, or 6 cents per share, doubling the 3 cents per share, or $1.7 million reported in the year prior quarter. Excluding a $900,000 tax benefit and other items, net income was 5 cents per share.
Wall Street was expecting EPS of 5 cents on revenue of $112.7 million.
“Given more than a 1% negative impact from the loss of leap year day, we are pleased with our system-wide same-store sales performance,” said Clifford Hudson, chairman and chief executive of Sonic. “We are especially pleased with the growth in same-store sales at our company drive-ins which led to a 140 basis point improvement in drive-in margins,” he added.
Same-store sales, a key measure of growth because it eliminates the impact of opening new stores, were essentially flat during the quarter overall, but corporate-owned stores’ comparable sales increased by 1.9 percent. Excluding the extra day in 2011, same-store sales were up by 1.3 percent system-wide, while corporate stores posted 3.3 percent growth.
Company drive-in sales slipped by $3.5 million, largely because Sonic refranchised 34 of its corporate stores during the second quarter.
For the first six months of fiscal 2013, net income totaled $9.7 million, or 17 cents per share, versus net income of $7.2 million, or 12 cents per share, for the same period in 2012.
Looking ahead, Sonic warned that macroeconomic conditions could result in sales volatility, but said that it expects positive same-store sales in the low single digit range.
Sonic, which has more than 3,500 restaurants across the U.S., with nearly 90 percent of them franchised, is working with its operators to streamline operations for greater profitability. The company has been developing a new, smaller prototype for its restaurants as part of its overall initiatives, which includes more efficient use of space and equipment, something it hasn’t done in nearly 20 years.
It’s been a good year for Sonic stakeholders with shares rising about 55 percent over the last 52 weeks. Shares closed the regular session down by 1 percent on Monday at $11.73, but reversed course in evening trading, printing up to $12.25 to swing up by about 3 percent for the day.