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Sonic profit slips in 3rd-Q

OKLAHOMA CITY Sonic Corp. on Tuesday reported its net income fell 16.5 percent in the third quarter as "lower-than-expected sales" and rising costs offset a slight increase in revenue.

Sonic, the operator or franchisor of more than 3,400 drive-ins, reported third-quarter net income of $17.2 million, or 28 cents a share, compared with $20.6 million, or 31 cents a share, in the year-ago quarter. Revenues rose 1.5 percent, to $213 million, from $209.9 million in the same quarter of 2007.

The company said it experienced a 0.4-percent decline in systemwide same-store sales, which it said was mostly because of cold, wet weather in March. Same-store sales at Sonic’s partner drive-ins, in which the company owns a majority interest, slid 3.9 percent in the quarter. The company said it hoped to improve those numbers with strategic pricing and a new focus on customer service.

In the quarter, Sonic opened 41 new drive-ins, relocated or rebuilt 17 existing stores and completed 279 retrofits.

"Traffic counts were positive for the system in the third quarter and reflected the ongoing success of our promotions, such as Sonic's Happy Hour and new coffee program," said Clifford Hudson, Sonic's chairman and chief executive. "Still, lower-than-expected sales for the quarter, coupled with mounting commodity pressures, had a negative impact on restaurant-level margins."

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