Drive-in restaurant chain Sonic Corp expects a 10 percent to 12 percent rise in 2010 profit as it expects to open more stores, but sees flat same-store sales at both partner and franchise drive-ins during the year.
Oklahoma City-based Sonic expects to open 115 to 125 new drive-ins in 2010 and sees improvements in the restaurant-level margins as a result of falling commodity costs.
Sonic also expects to gain in 2010 from the refranchising of about 200 partner drive-ins to both new and existing franchisees during 2009.
However, a challenging economic environment constrained consumer discretionary spending and sales in the fourth quarter ended Aug. 31, the company said.
While same-store sales at Sonic fell 4.5 percent during the quarter, those for partner drive-ins -- in which Sonic owns a majority interest -- also dipped 5.4 percent. Shares of Sonic, which have risen 47 percent in the last six months, closed at $12.02 Wednesday on Nasdaq.
(Reporting by Shradhha Sharma in Bangalore; Editing by Anil D'Silva)