Sonic Corp., the nation’s largest chain of drive-in restaurants, announced results for its second fiscal quarter ended February 28.
Key highlights of the company’s second quarter of fiscal year 2017 included:
Net income per diluted share increased 14 percent to $0.25 versus $0.22 in the prior-year period; adjusted net income per diluted share declined 17 percent to $0.15 versus $0.18 in the prior-year period.
System same-store sales declined 7.4 percent, consisting of a 7.3 percent same-store sales decrease at franchise drive-ins and an 8.9 percent decrease at company drive-ins.
Company drive-in margins declined by 330 basis points.
Ten new drive-ins opened and 54 drive-ins were refranchised.
The company repurchased 1.8 million outstanding shares.
"Our second quarter results reflect a sluggish consumer environment, weather headwinds and share losses following exceptionally strong performance over the prior two years," says Cliff Hudson, Sonic Corp. CEO. “As we enter the key spring and summer seasons, we believe a better balance of new product news and targeted value will result in sequential improvement in same-store sales and profitability.
“Our unit growth, capital structure and technology initiatives are on track,” says Hudson. “We completed our refranchising program ahead of schedule with 54 drive-ins divested during the quarter, leaving us with a stronger portfolio of company-owned stores. We are also pleased to have repurchased 1.8 million shares of our stock in the second quarter of 2017, representing 4 percent of shares outstanding, while continuing to invest in the development, people and technology that will drive us to deliver the most personalized guest experience in the industry."
For the second quarter ended February 28, 2017, system same-store sales decreased 7.4 percent, which was comprised of a 7.3 percent same-store sales decline at franchise drive-ins and a decline of 8.9 percent at company drive-ins.
For the second fiscal quarter of 2017, the company’s net income totaled $11.0 million or $0.25 per diluted share compared to net income of $10.8 million or $0.22 per diluted share in the same period of the prior year. Excluding the items outlined below, net income and net income per diluted share declined 27 percent and 17 percent, respectively.
The following analysis of non-GAAP adjustments is intended to supplement the presentation of the company’s financial results in accordance with GAAP. The company believes that the presentation of this analysis provides useful information to investors and management regarding the underlying business trends and the performance of the company’s ongoing operations and is helpful for period-to-period and company-to-company comparisons, which management believes will assist investors in analyzing the financial results of the company and predicting future performance.