OKLAHOMA CITY Sales trends at Sonic Corp. remained negative for its February-ended second quarter, despite the chain’s late-December introduction of its Everyday Value Menu, which was developed to spark customer traffic.
Estimated same-store sales for the quarter, which Sonic said is its slowest time of the year, are expected to drop between 3 percent and 4 percent systemwide and fall between 5.5 percent and 6.5 percent at corporate restaurants, the company said Thursday.
The results were no better than the prior quarter’s systemwide same-store sales decline of 3.6 percent, which led Sonic to debut a permanent value menu to help drive sales. At that time, the company said it would respond to consumer woes with a more strategic approach to menu pricing, including its Everyday Value Menu. Sonic said in its Thursday report that the new menu, which features 11 items for $1 each, had helped improve sales during the quarter and will continue to improve sales trends in the coming months.
Some restaurant analysts were not certain it will be a success.
“The value menu has yet to prove the elusive ‘silver bullet’ to meaningfully bolster Sonic’s sales trends,” said Sharon Zackfia, an analyst at William Blair & Co.
Sonic, which operates or franchises about 3,500 restaurants, also said Thursday that proceeds from refranchising efforts were used to purchase $25 million of the company’s $559.5 million of senior notes. The purchase of the notes at a discount will result in a gain for the second quarter, the company said. It added that future proceeds garnered from refranchising efforts will be used to reduce debt or for other stockholder-friendly actions.
Sonic is scheduled to report full second-quarter results on March 23.
Contact Sarah Lockyer at [email protected].
