Drive-in restaurant chain operator Sonic Corp. (SONC) said Monday that second quarter profit declined by 7% over last year, hurt by lower sales at partner drive-ins combined with ongoing restaurant operating cost pressures.
The Oklahoma City, Oklahoma-based company's net income for the second quarter declined 7% to $8.7 million or $0.14 per share from $9.3 million or $0.15 per share in the prior year quarter. On average, 18 analysts polled by Thomson Reuters expected the company to earn $0.09 per share for the second quarter. Analysts' estimate typically excludes special items.
Result for the quarter under review included a gain from early extinguishments of debt of about $6.4 million or $0.06 per share.
Second quarter revenues declined 3% to $169 million from $174.6 million in the same quarter of last year. Thirteen analysts had a consensus revenue estimate of $170.20 million for the second quarter.
System-wide same-store sales for the quarter declined 3.6%, over an increase of 3.2% for same quarter last year, reflecting a 3% lower same-store sales at franchise drive-ins and a 6% decline at partner drive-ins.
Partner Drive-in sales for the second quarter declined to $141.7 million from $147.1 million in the previous year quarter. Franchise royalty revenues rose to $26.4 million from $25.7 million in the prior year quarter. Franchise fees decreased to $62 thousand from $779 thousand in the year-ago quarter.
During the quarter, Sonic opened 27 new System-wide new drive-in restaurants, and relocated or rebuilt 12 restaurants. The company recently signed agreements to enfranchise 90 additional partner drive-ins in nine markets.
The company said that customer traffic was higher after the introduction of its Everyday Value Menu that offers customers a broad selection of one-dollar food, drink and dessert menu items for all day parts. The company has planned to boost sales by offering promotions for premium quality products to improve average check and complement its value menu's positive impact on traffic.
For the first half of fiscal 2009, Sonic reported net income of $15.8 million or $0.26 per share, down 31% from $22.8 million or $0.36 per share in the previous year period.
Revenues for the year-to-date period declined 3% to $353.1 million from $364.8 million in the preceding year period.
Sonic closed Monday's regular trading session at $9.28, up 75 cents or 8.79% on a volume of 1.17 million shares. In the after-hours, the shares further gained 87 cents or 9.37%.
For comments and feedback: contact email@example.com