Sonic Corp (SONC) Tops Q2 EPS by 1c; Offers FY18 EPS Outlook Below Consensus

Note: EPS may not be comparable

Sonic Corp (NASDAQ: SONC) reported Q2 EPS of $0.17, $0.01 better than the analyst estimate of $0.16. Revenue for the quarter came in at $88.1 million versus the consensus estimate of $94.42 million.

Fiscal Year 2018 Outlook

While the macroeconomic environment may impact results, the company now expects adjusted earnings per share for fiscal year 2018 to be between $1.43 and $1.50 inclusive of tax reform. Excluding the impact of tax reform, the company expects an increase of 2% to 7% year over year.

The outlook for fiscal 2018 anticipates the following elements:

• Same-store sales for the system to be down 1% to up 1% year over year;
• Royalty revenue growth from new unit development;
• 55 to 65 new franchise drive-in openings;
• Drive-in-level margins of 15.0% to 15.5%, depending upon the degree of same-store sales growth at company drive-ins;
• Selling, general and administrative expenses of $76 million to $78 million;
• Depreciation and amortization expense of $39 million to $41 million;
• Net interest expense of $32 million to $34 million;
• Capital expenditures of approximately $40 million;
• Free cash flow(1) of $60 million to $63 million;
• An income tax rate of approximately 25.0% to 26.0%;
• The repurchase of approximately $160 million in shares across the fiscal year; and
• An expected quarterly cash dividend of $0.16 per share.

GUIDANCE:

Sonic Corp sees FY2018 EPS of $1.43-$1.50, versus the consensus of $1.52.

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

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