Sonic Corp (SONC) Reports In-Line Q3 EPS, Comps Increase 6.1%, Offers Q4 Guidance

(Updated with Q4 guidance)

Sonic Corp (NASDAQ: SONC) reported Q3 EPS of $0.36, in-line with the analyst estimate of $0.36. Revenue for the quarter came in at $164.7 million versus the consensus estimate of $164.17 million. Comps increased 6.1%.

Fiscal Year 2015 Outlook

The company expects its initiatives to drive 27% to 29% earnings per share growth, on an adjusted basis, in fiscal 2015 as compared to the adjusted non-GAAP earnings per share for fiscal 2014. The macroeconomic environment may impact results. The outlook for the fourth fiscal quarter of 2015 anticipates the following elements:

• Positive same-store sales in the mid-single digit range for the system;
• 22 to 27 new franchise drive-in openings, resulting in net unit growth for the system;
• Drive-in-level margin improvement of between 100 to 150 basis points, reflecting an improving outlook for commodity cost inflation and leverage from company drive-in same-store sales growth;
• Selling, general and administrative expenses of $20.5 million to $21 million, reflecting increased investment in human resources to support the brand initiatives described above;
• Depreciation and amortization expense of approximately $11.5 million to $12 million;
• Net interest expense of approximately $6 million to $6.5 million; and
• An income tax rate of between 36.5% and 37%, reflecting the benefit of various ongoing tax credit programs.

The company anticipates the following elements for fiscal 2015:

• Capital expenditures of $35 million to $40 million;
• Free cash flow of $70 million to $75 million;
• The completion of the planned repurchase of $105 million of stock; and
• A quarterly cash dividend of $0.09 per share resulting in an estimated payout of $19 million.

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

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