Prices of Sonic Corp. shares fell Wednesday after the drive-in operator warned that third-quarter same-store sales would fall short of guidance.
Oklahoma City-based Sonic said late Tuesday that while it expects same-store sales to remain positive in the third quarter ended May 31, they would fall “below the full-year target of 4 percent to 6 percent as a result of slower industry traffic and modestly unfavorable weather during the quarter.”
At midday Wednesday, Sonic’s stock price was down nearly 7 percent from Tuesday’s close of $32.53, trading around $30.25 a share. Trading volume at midday was about 2.5 million shares, more than double the average daily volume of 962,182, according to Nasdaq calculations.
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Despite the third-quarter warning, Sonic said it continued to expect adjusted earnings per share growth of 20 percent to 25 percent for the full fiscal 2016.
Sonic also said that its board approved an additional $155 million for the share buyback program, in addition to the more than $21 million still remaining for the prior plan.
For the second quarter ended Feb. 29, Sonic reported that net income increased 41.2 percent, to $10.8 million, or 22 cents a share, from $7.6 million, or 14 cents a share, in the same period a year ago. Revenue rose 5.5 percent, to $133.2 million, from $126.2 million in the prior-year quarter.
Sonic same-store sales increased 6.5 percent systemwide, consisting of 6.5-percent same-store sales growth at franchised drive-ins and a 6.3-percent climb at company-operated restaurants. Sonic said margins at company locations improved by 60 basis points.
Sonic has 3,500 drive-in restaurants nationwide.
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