OKLAHOMA CITY Sonic Corp., owner or franchisor of 3,400 drive-ins, said its fourth quarter profit fell 8 percent from a year ago because of slow sales and higher labor and food costs.
Net income for the quarter, which ended Aug. 31, fell to $20.2 million, or 33 cents per share, from $22 million, or 34 cents per share, the year before, Sonic said.
Revenue rose 1 percent to $226.9 million from $224.3 million in the year-ago fourth quarter. Sales at units in which the company owns a majority interest fell 1 percent.
Sonic reported food and labor costs both rose around 6 percent for the latest quarter.
Systemwide same-store sales for the quarter slipped 0.6 percent, as a 6.3-percent decline in company same-store sales offset a 0.7-percent rise at franchised units. For the full year, systemwide same-store sales increased 0.9 percent, Sonic reported.
For the year, net income fell 6 percent to $60.3 million, or 97 cents per share, from $64.2 million, or 91 cents per share, in the prior year, when there were 8.2 million more shares outstanding. Revenue for fiscal 2008 rose 4 percent to $804.7 million from $770.5 million last year, Sonic reported.
Clifford Hudson, Sonic’s chairman and chief executive, said the chain expanded into new markets during the year, including New Jersey, Michigan and Minnesota.
“However,” he said, “our business continues to face a number of challenges, including weakening consumer sentiment compounded by steadily rising commodity and labor costs.”