Sonic Profit Tops Estimate; Stock Up - Update

(RTTNews) - The largest drive-in restaurant chain in the U.S., Sonic Corp (SONC) on Tuesday reported an increase in first-quarter profit, led by higher revenues with both earnings and revenue topping Wall Street estimates.

Sonic said that while the macroeconomic environment may impact results, it expects its initiatives to drive earnings-per-share growth in fiscal 2015 at the high end or slightly above its long-term 14 to 20 percent target, versus adjusted EPS in 2014.

"We are extremely pleased with our performance in the first quarter and believe that our focus on innovative products, increased media effectiveness and a layered day-part promotional strategy were instrumental to our continued success," said Cliff Hudson, Sonic CEO.

"Our business momentum remains strong as improvements in core menu items combined with limited-time-offer promotions are driving our same-store sales growth. Further, we expect our technology initiatives will provide an additional layer of growth to build sales and profits over the next several years."

Sonic shares gained 4 percent in after-hours trade on the Nasdaq, following the results.

Sonic, based in Oklahoma City, reported first-quarter net income of $10.1 million or $0.18 per share, compared with $8.2 million or $0.14 per share last year.

On average, 17 analysts polled by Thomson Reuters expected earnings of $0.16 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the first quarter rose to $139.9 million from $126.7 million a year ago, topping analysts' expectations of $133.7 million.

System same-store sales for the quarter climbed 8.5 percent, consisting of an 8.5 percent increase at franchise drive-ins and an increase of 7.9 percent at company drive-ins.

Company drive-in margins improved by 70 basis points versus the prior year.

At the end of the quarter, the company had system-wide 3,517 drive-ins, mostly franchises.

SONC closed Tuesday at $27.09, up $0.05 or 0.18%, on a volume of 1.8 million shares. In after hours, the stock gained $1.11 or $4.1%.