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Sonic Corporation (SONC) Shares Sink on Q2 Revenue Miss

Sonic Corporation (NASDAQ:SONC) reported its latest quarterly earnings results after hours Tuesday, which missed expectations on the revenue front.

Sonic Corporation (SONC)The fast food chin reported net income of 51 cents per diluted share, a 104% increase compared to the year-ago total of 25 cents per share. On an adjusted basis, the restaurant operator posted income of 17 cents per share, a 13% gain from the 15 cents per share it brought in during the year-ago period.

The figure was stronger than analysts’ adjusted earnings expectations of 16 cents per share by a penny, Sonic added in its second-quarter report of fiscal 2018. On the revenue front, the company brought in $88.1 million, missing the Wall Street consensus estimate of $94.4 million by more than $6 million.

The restaurant chain’s system same-store sales declined by 2.9% year-over-year due to a 2.8% same-store sales slide at franchise drive-ins and a 3.7% decrease at company drive-ins. Sonic’s company drive-in margins were favorable by 40 basis points.

Sonic opened eight new drive-ins during its second quarter, plus the company repurchased 1.2 million outstanding shares. “Our second quarter same-store sales decline reflected unfavorable weather and continued aggressive discounting by the competition,” said Cliff Hudson, Sonic Corp. CEO.

“We continued to support a simplified everyday value message via the Drive-In Duo in December and January, which featured a cheeseburger and shake for $3.99, and a Quarter-Pound Jr. Double Cheeseburger and Tots for $2.99 in February,” he added. “These types of broadly appealing value offerings provide a compelling price point and highlight Sonic’s quality differentiation.”

Sonic also missed Wall Street’s guidance for fiscal 2018 as the company is calling for earnings in the range of $1.43 to $1.50 per share on an adjusted basis, below the consensus of $1.52 per share.

SONC stock fell about 5.3% after the bell Tuesday.

Article printed from InvestorPlace Media, https://investorplace.com/2018/03/sonic-corporation-sonc-2/.

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