Despite reporting a drop in same-store sales for the fourth quarter, Sonic Corp. said it was starting to see improvement at its corporate locations.
Sonic said systemwide same-store sales declined 6.4 percent for the Aug. 31-ended quarter, which included a 6.1-percent drop at corporate drive-ins. It marked the first time in nearly three years that corporate stores outperformed the system as a whole, said Clifford Hudson, Sonic's chairman and chief executive.
"With our company-owned drive-ins' corresponding improved performance on various customer feedback measures, we believe we are seeing positive signs indicating that aspect of our business is improving," he said.
Shares in Oklahoma City-based Sonic Corp. were trading at higher prices and volumes Wednesday after several analysts maintained their recommendations on the stock. The company's share price was up about 4 percent at $7.96 in midday trading, and its share volume was nearly 1.3 million, nearly double the 50-day average daily volume of 671,375 shares, according to Nasdaq.com.
Sonic, which will report full fourth-quarter results on Oct. 19, said 25 new stores opened during the fourth quarter, all but one of them by franchisees. For the fiscal year, 80 franchise units opened, compared with 130 in the prior fiscal year. The company said “the pace of new drive-in openings was slowed by the challenging sales environment and difficult economic conditions.” The company currently operates or franchises more than 3,500 drive-ins.
Sonic offered limited guidance for fiscal 2011, citing the still fragile economy, but noted that it expected sales to steadily improve.
“While we think it is prudent to take a conservative approach to our sales outlook for fiscal 2011, because of the uniquely challenging environment, we do expect improvement in same-store sales as our sales-building initiatives improve traffic," Hudson said.
Contact Ron Ruggless at [email protected].