Sonic Corp. (NASDAQ: SONC) has come out after the close with reduced guidance. The outdoor drive-up burger chain is feeling the pinch from raw materials costs, labor costs, food costs, transport costs, and probably a gas-starved suburban driver client base.
The company sees a 10% decline in Q3 net income to $0.28 EPS versus $0.31 in the prior year. The company noted that Q3 revenues were up 1% to $213.0 million. First Call is expecting $0.31 EPS on $219.95 million.
It also sees a -0.4% decline in system-wide same-store sales resulting primarily from weather-affected sales in March; system-wide same-store sales improved as the quarter progressed and returned to the company’s targeted growth range of 2% to 4% in May. The company did notes that the traffic for the quarter was slightly positive.
The company also had an opening of 41 new drive-ins in Q3, with the relocation or rebuild of 17 existing drive-ins, and the completion of 279 retrofits.
Sonic expects that its Fiscal 2008 EPS will increase in the range of 4% to 6% in fiscal 2008 versus fiscal 2007 earnings per diluted share of $0.96. While that number is adjusted for prior-year debt refinancing charges. That is only out to August 2008 and the First Call estimate is $1.05 EPS.
Sonic shares closed up 1.3% at $16.51 in regular trading, and its shares are down over 3.5% at $15.90 in after-hours. Its 52-week trading range is $15.65 to $26.19.
Jon C. Ogg
June 24, 2008
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