Post Earnings Coverage as Sonic’s Top-line Grew 17% y-o-y

Upcoming AWS Coverage on Yum! Brands

LONDON, UK / ACCESSWIRE / January 9, 2017 / Active Wall St. announces its post-earnings coverage on Sonic Corp. (NASDAQ: SONC). The Company released its financial results for the first quarter fiscal 2017 (Q1 FY17) on January 04, 2017. The Oklahoma City-based Company’s quarterly revenues grew 17% y-o-y and recorded a flat adjusted EPS growth in the reported quarter. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Sonic’s competitors within the Restaurants space, Yum! Brands, Inc. (NYSE: YUM), is expected to report earnings on February 08, 2017 after market close. AWS will be initiating a research report on Yum! Brands following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on SONC; touching on YUM. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=SONC

http://www.activewallst.com/registration-3/?symbol=YUM

Earnings Reviewed

Sonic posted total revenue of $129.55 million in Q1 FY17 compared to $145.80 million recorded in Q1 FY16. However, total revenue numbers marginally lagged market forecasts of $132.6 million. Furthermore, the Company’s same-store sales were down by 2.0% y-o-y, consisting of a 2.0% decline in franchise drive-ins same-store sales and a 2.4% fall in the company-owned drive-ins.

During the quarter, the Company reported total costs and expenses of $102.50 million, which was lower than the $119.76 million recorded in the prior year’s same quarter numbers. Operating income improved to $27.05 million, or 18.7% of total revenues, in Q1 FY17 from $26.05 million, or 17.9% of total revenues, in Q1 FY16.

The drive-in restaurateur’s net income rose to $13.12 million, or $0.28 per diluted share, in Q1 FY17 from $12.46 million, or $0.24 per diluted share, in Q1 FY16. The Company’s non-GAAP net income for the reported quarter stood at $11.29 million, or $0.24 per diluted share, compared to $12.46 million, or $0.24 per diluted share, in Q1 FY16. Furthermore, diluted adjusted net income outperformed market expectations of $0.22 per diluted share.

Cliff Hudson, CEO of Sonic Corp., stated in the earnings press release:

“Our first quarter results reflect a sluggish consumer landscape and exceptionally strong prior-year performance. Although the business faces even tougher sales and margin hurdles in the second fiscal quarter, we remain optimistic in our ability to show sequential same-store sales and profitability improvement beginning in the second half of fiscal 2017.”

Segment-wise

Sonic’s Drive-ins total sales came in at $87.15 million in Q1 FY17 compared to $103.88 million in the previous year’s comparable quarter. During the reported quarter, the segment’s average drive-in sales were flat at $270 compared to the same period last year. Furthermore, the segment same-store sales declined 2.4% in Q1 FY17 compared to a 4.4% same-store sales growth recorded in the year ago comparable quarter.

During Q1 FY17, the Company received $40.14 million as Franchise royalties and fees compared to $39.92 million in prior year’s comparable quarter. The Q1 FY17 lease revenues from the Franchise Drive-ins segment were $1.38 million compared to $1.59 million in Q1 FY16. The segment reported total sales of $975.78 million in the reported quarter versus $968.96 million in prior year’s corresponding quarter. However, average drive-in sales were down to $304 in Q1 FY17 compared to $310 in Q1 FY16. Furthermore, the segment’s same store sales was down by 2.0% in Q1 FY17, against a 5.3% growth in the year ago same quarter.

Cash Matters and Balance Sheet

During the three months ended November 30, 2016, net cash provided by operating activities was $19.23 million compared to $25.77 million in the year ago comparable period. Sonic had cash and cash equivalents worth $41.09 million at the close of its books on November 30, 2016, versus cash and cash equivalents worth $72.09 million as on August 31, 2016. The Company’s long-term debt stood at $566.67 million as on November 30, 2016, compared to $566.19 million as on August 31, 2016.

Share Repurchase

In Q1 FY17, Sonic repurchased 2 million shares which were 4% of the Company’s outstanding shares. The average diluted shares outstanding were down about 9% y-o-y into the reported quarter.

Outlook

For full year FY17, Sonic’s management continues to expect adjusted earnings per share to be in the range of down 7% to flat y-o-y. The Company anticipates same-store sales growth in FY17 to be in the range of (2)% to 0%.

Stock Performance

At the closing bell, on Friday, January 06, 2017, Sonic’s stock was marginally down 0.62%, ending the trading session at $27.38. A total volume of 856.15 thousand shares were traded at the end of the day. In the last month and previous three months, shares of the Company have advanced 1.52% and 5.05%, respectively. The stock is trading at a PE ratio of 21.49 and has a dividend yield of 2.05%.

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