Sonic Corp (SONC) Reports Preliminary Q4 Same-Store Sales; Issues Guidance for FY09

Sonic Corp. (NASDAQ: SONC) announced preliminary same-store sales for the fourth quarter and fiscal year ended August 31, 2008. While franchise drive-in same-store sales were positive for the fourth quarter, same-store sales for partner drive-ins (drive-ins in which the company owns a majority interest) continued to be significantly negative, resulting in slightly negative system-wide same-store sales. For the fiscal year ended August 31, 2008, estimated system-wide same-store sales were positive, with estimated franchise drive-in same-store sales slightly below the targeted range of 2% to 4%, and partner drive-in sales three to four percentage points below franchise drive-in performance. Result are expected to be slightly positive in earnings per share for fiscal 2008 compared to 2007.

Fiscal 2009 Outlook

Growth in franchising income, coupled with gains from refranchising efforts, is expected to result in an increase in earnings per diluted share in the range of 12% to 14% for fiscal 2009 versus fiscal 2008 earnings per diluted share. These expectations are based on the following assumptions:

The refranchising of underperforming partner drive-ins in core and developing markets; The opening of 155 to 165 new franchise drive-ins; The opening of 20 to 25 new partner drive-ins; Positive same-store sales growth for the system, even though same-store sales growth for partner drive-ins is expected to be flat; Unfavorable restaurant-level margins compared with fiscal 2008; and Capital expenditures of $60 to $70 million, reflecting the completion of fewer retrofits and no acquisitions.

Impact of Hurricanes

Approximately 100 partner drive-ins and 336 franchise drive-ins across the Gulf Coast area were closed as a result of Hurricanes Gustav and Ike. Partners, franchisees and company employees have been working diligently to restore operations with limited or full menus. As of September 23, however, 23 partner drive-ins and 50 franchise drive-ins remained closed. For the first quarter of fiscal 2009, which ends on November 30, 2008, store closures are anticipated to negatively affect revenues by approximately 1%. This number may vary somewhat as drive-ins that re-open tend to temporarily experience sales levels well above normal.[SM]

You May Also Be Interested In

• BJ's Wholesale Club (BJ) Tops Q2 EPS by 19c, Beats on Revenue; Offers FY27 EPS Guidance
• Marti Technologies (MRT) Misses Q2 EPS by 9c ; Offers Guidance
• La-Z-Boy (LZB) Misses Q1 EPS by 6c, Misses on Revenue; Offers Weak Q2 Revenue Guidance