Sonic Corp.’s systemwide same-store sales declined 2 percent in the first quarter ended Nov. 30, reflecting a “sluggish consumer,” the company said Wednesday.
Oklahoma City-based Sonic reported same stores sales declined 2 percent at franchised drive-ins and 2.4 percent at company-owned restaurants.
"Our first quarter results reflect a sluggish consumer landscape and exceptionally strong prior-year performance," said Cliff Hudson, Sonic CEO, in a statement.
First-quarter net income rose 5.3 percent, increasing to $13.1 million, or 28 cents a share, from $12.5 million, or 24 cents a share, in the prior-year quarter. Revenue was down 11.1 percent, to $129.5 million, from $145.8 million in the same period last year as the company refranchised 56 drive-ins.
Sonic said margins at its company-owned restaurants declined by 150 basis points in the quarter.
“Although the business faces even tougher sales and margin hurdles in the second fiscal quarter,” Hudson said, “we remain optimistic in our ability to show sequential same-store sales and profitability improvement beginning in the second half of fiscal 2017.”
In guidance, Sonic said it expected same-store sales for the entire year to be flat to down 2 percent and earnings per share to be flat to down 7 percent.
Hudson said Sonic’s refranchising initiative would be completed by the end of the third quarter, “leaving us with a more efficient, higher-margin portfolio of company-owned stores.”
Sonic has 3,500 drive-in restaurants in its system.
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