OKLAHOMA CITY Sonic Corp.’s profit for the first quarter ended Nov. 30 slipped 11 percent year-over-year, but earnings per share exceeded market expectations because of stock buybacks, the operator or franchisor of 3,500 drive-ins said.
Systemwide same-store sales grew 2.1 percent, with a 1.9-percent bump at franchised units and a 2.9-percent increase at partner drive-ins, in which Sonic holds a majority interest, the company said. That compares with a systemwide same-store sales increase of 3.4 percent in the year-ago quarter.
Profit for the first quarter of fiscal 2008 was $13.6 million, or 22 cents a share, compared with $15.3 million, or 19 cents a share, in fiscal 2007, according to the company, which is based here. Per-share income rose 16 percent because a share repurchase program reduced outstanding shares from about 79.5 million to 63.1 million in the most recent quarter. The company has repurchased more than 30 percent of its outstanding stock since the beginning of fiscal 2007, at an aggregate price of about $590 million.
Revenues for the first quarter rose 9 percent to $190.2 million, from $174.8 million in the same period a year ago, Sonic reported.
“We are very pleased with first quarter results, highlighted by higher earnings per diluted share -- up 16 percent from the first quarter last year and a penny ahead of the market's expectation for the period,” said Clifford Hudson, Sonic’s chairman and chief executive. “Despite a slow start in September, sales and traffic rebounded nicely in October and November, producing same- store sales within our long-term target range and driving positive traffic for the quarter.”
Hudson added, "Our expectations for fiscal 2008 are high, and we remain on track for earnings growth in the range of 15 percent to 17 percent for the full year, although we recognize that the second quarter is seasonally our slowest and more susceptible to extreme weather conditions.”
The company said it anticipates same-store sales to increase between 2 percent and 4 percent for the year, with partner drive-ins performing near the high end of that range.
Sonic also plans to add 180 to 200 drive-ins, including 155 to 165 franchise units, reflecting system growth of about 6 percent.
For the first quarter, Sonic said it opened 36 new drive-ins, relocated or rebuilt 15 existing drive-ins, and retrofitted 240 units with the company’s new look.