OKLAHOMA CITY — New menu items and a national media campaign contributed to strong sales growth for Sonic Corp. in the recent quarter. Expected to drive continued momentum for the fast-food chain are technology initiatives designed to provide a more personalized experience for customers, “particularly a millennial consumer and their use of 21st century forms of communication beyond what their parents have utilized, you might say,” said Cliff Hudson, chief executive officer of Sonic Corp., during a June 22 earnings call with financial analysts.
For the third quarter ended May 31, Sonic had net income of $20,442,000, equal to 39c per share on the common stock, up 22% from $16,776,000, or 31c per share, in the prior-year period. Excluding tax adjustments, net income increased 15%, according to the company.
Revenues for the quarter totaled $164,748,000, up more than 8% from $152,187,000 in the year-ago period.
System same-store sales advanced 6.1%, which included a 6.1% increase at franchise drive-ins and a 5.5% increase in company units. Weather had a disproportionately negative impact on company drive-in sales during the quarter, the company said.
During the quarter, Sonic continued the roll-out of new technology platforms across its more than 3,500 drive-in restaurants. The new software-based point-of-sale system, which is designed to streamline order processing, reduce product waste, optimize labor allocation and reduce theft, is now in more than 1,100 stores. The point-of-personalized service system, which has been added to more than 900 stores, plays into Sonic’s integrated customer engagement strategy, which leverages mobile apps and social media to strengthen customer loyalty and increase traffic.
Executives noted an improvement in performance at restaurants with the new platforms, following initial challenges with implementation earlier in the year.
“We look forward to leveraging those drivers of same-store sales growth, along with our other strategic growth initiatives over the next several years, in order to continue to grow the 14% to 20% e.p.s. growth rate over the long term,” Mr. Hudson said.For fiscal 2015, Sonic expects to achieve an increase of 27% to 29% in adjusted earnings per share and mid-single-digit growth in same-store sales.