Sonic Corp (SONC) Tops Q4 EPS by 2c, Miss on Revenues

Sonic Corp (NASDAQ: SONC) reported Q4 EPS of $0.45, $0.02 better than the analyst estimate of $0.43. Revenue for the quarter came in at $123.57 million versus the consensus estimate of $126.92 million.

Fiscal Year 2018 Outlook

While the macroeconomic environment may impact results, the company continues to expect adjusted earnings per share for fiscal year 2018 to increase 5% to 10% year over year. The outlook for fiscal 2018 anticipates the following elements:

• Approximately 0% to 2% same-store sales growth for the system;
• Royalty revenue growth from new unit development;
• 70 to 80 new franchise drive-in openings;
• Drive-in-level margins of 15.1% to 15.7%, depending upon the degree of same-store sales growth at company drive-ins;
• Selling, general and administrative expenses of approximately $76 million to $78 million;
• Depreciation and amortization expense of $40 million to $42 million;
• Net interest expense of approximately $32 million to $34 million;
• Capital expenditures of $38 million to $40 million; excluding spending on build-to-suit drive-in development, capital outlays would be $34 million to $36 million;
• Free cash flow(1) of approximately $60 million to $65 million;
• An income tax rate of approximately 35.0%;
• The repurchase of approximately $160 million in shares across the fiscal year; and
• An expected quarterly cash dividend of $0.16 per share.

Key highlights of the company’s fourth quarter of fiscal year 2017 included:

• Net income per diluted share decreased 6% to $0.50 versus $0.53 in the prior-year period; adjusted net income per diluted share remained the same as the prior-year period at $0.45;
• System same-store sales declined 3.3%, consisting of a 3.2% same-store sales decrease at franchise drive-ins and a 4.8% decrease at company drive-ins;
• Company drive-in margins increased by 230 basis points;
• 27 new drive-ins opened; and
• The company repurchased 1.8 million outstanding shares.

For earnings history and earnings-related data on Sonic Corp (SONC) click here.

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