Sonic Corporation (NASDAQ:SONC) announced preliminary results for its fourth fiscal quarter ended August 31, 2016.
The company estimates that system-wide same-store sales for its fourth fiscal quarter decreased approximately 2.0%. Estimated same-store sales performance reflects a decrease of approximately 3.0% at company drive-ins and a decrease of approximately 1.8% at franchise drive-ins for the fourth fiscal quarter. Additionally, net income per diluted share is anticipated to be $0.51 to $0.53. Adjusted net income per diluted share is estimated to be $0.43 to $0.45 for the fourth fiscal quarter.
“While we delivered a solid overall fiscal 2016 performance with 2.6% system-wide same-store sales growth, the fourth quarter was below our expectations from both a sales and a profit perspective,” said Cliff Hudson, Sonic Corp. CEO. “The shortfall was largely driven by lower-than-expected traffic, reflecting lower consumer spending in restaurants and continued aggressive competitive activity. As we look ahead to fiscal 2017, we remain focused on delivering one of the most differentiated customer experiences in the quick service industry with innovative products, targeted value propositions and outstanding customer service.”
In the fourth fiscal quarter, 19 new drive-ins were opened. In fiscal 2016, 53 new drive-ins were opened. On a net basis, the brand saw an increase of 31 drive-ins for fiscal 2016, representing a 1% increase in system drive-ins.
Preliminary results remain subject to the completion of normal quarter-end accounting procedures and adjustments and are subject to change. Final results for the fourth fiscal quarter of 2016 as well as the company’s outlook for fiscal year 2017 will be released on October 24, 2016. (Original Source)
Shares of Sonic tumbled nearly 7% in after-hours trading Tuesday. SONC has a 1-year high of $36.34 and a 1-year low of $22.72. The stock’s 50-day moving average is $27.75 and its 200-day moving average is $29.98.
On the ratings front, SONC has been the subject of a number of recent research reports. In a report issued on September 19, UBS analyst Dennis Geiger reiterated a Hold rating on SONC, with a price target of $28, which represents a slight upside potential from current levels. Separately, on September 9, Canaccord’s Lynne Collier reiterated a Buy rating on the stock and has a price target of $35.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Dennis Geiger and Lynne Collier have a total average return of 29.3% and 10.5% respectively. Geiger has a success rate of 67% and is ranked #1769 out of 4183 analysts, while Collier has a success rate of 70% and is ranked #495.
Overall, 2 research analysts have assigned a Hold rating and 2 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $37.50 which is 37% above where the stock opened today.
Sonic Corp. operates and franchises a chain of quick-service restaurants. It also leases real estate and receives equity earnings in non-controlling ownership in a number of franchise drive ins.