Audited earnings will be released Oct. 21, but the company said it expects full-year systemwide same-store sales to increase 2.3 percent for the fiscal year ended Aug. 31.
Analyst Lynne Collier of Sterne Agee said the fourth-quarter results “were well above our expectations.” Analysts had expected a 1.8-percent to 2-percent increase in same-store sales for the quarter.
New products and promotions, along with other initiatives, helped drive sales in the fourth quarter, the company said.
“The ‘Summer of Shakes’ promotion, featuring 25 different shake flavors, and the limited-time-offer promotion, featuring two new pretzel dogs, were especially popular,” the company said.
But those sales came with higher costs, Sonic acknowledged. “Food costs associated with the successful fourth-quarter promotions were unfavorably impacted due to product mix shift,” the company said, adding that it still expected fourth-quarter net income to increase 20 percent to 30 cents per share.
Collier said that the company’s expectation is two cents higher than her earlier forecast of 28 cents a share. However, she noted that she’s maintaining a neutral rating on Sonic, since she believes “much of the good news is currently reflected in the stock.”
She said that Sonic has been trading at about 21.9 times the fiscal year earnings projections of 83 cents a share.
Sonic released its preliminary same-store sales in advance of the company’s national convention next week in San Diego, where it will celebrate its 60th year.
“Our results reflect the strength and momentum of the Sonic brand,” said Cliff Hudson, Sonic’s chairman, chief executive and president, in a statement, “and we look forward to continued growth in the near and long term.”
Sonic has more than 3,500 drive-ins nationwide.
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