Sonic Corp., parent to the 3,500-unit drive-in chain, reported a 72-percent decline in net income for the fourth quarter on one-time charges and continued declines in sales.
The Oklahoma City-based Sonic reported net income of $4.7 million, or 8 cents per share, for the fourth-quarter ended Aug. 31, compared with earnings of $16.9 million, or 28 cents per share, in the same quarter a year earlier. Excluding one-time items, which included a $15 million impairment charge, per share earnings totaled 23 cents in the latest quarter, Sonic reported, compared with 29 cents in the fourth quarter a year ago.
The impairment charges were related to write-downs of corporate stores in Florida and South Texas, said Stephen Vaughan, Sonic’s chief financial officer.
Sonic’s fourth-quarter revenue fell 10.1 percent to $115.4 million. Systemwide same-store sales fell 6.4 percent, which reflected drops of 6.4 percent at franchised drive-ins and 6.1 percent at corporate locations.
Sonic has been working to implement menu, service and marketing changes during the past year, and added that same-store sales performance has improved since September. A menu price increase at corporate drive-ins is set for November, the company added.
“The fourth quarter offered some signs that our initiatives are gaining traction,” Clifford Hudson, Sonic’s chairman and chief executive, said in a statement. “One positive indicator was the sales performance of our company-owned drive-ins.
“After lagging franchise drive-ins significantly for almost three years, our company-owned drive-ins closed much of the gap in same-store sales in the third quarter and pulled slightly ahead of franchise drive-ins in the fourth quarter.”
Contact Ron Ruggless at [email protected].