Sonic Boom For Restaurant Franchise
Posted on: 13/09/2006
The Sonic restaurant franchise announces twentieth consecutive year of positive same-store sales performance sales momentum and development trends expected to continue into fiscal 2007.
Sonic Corp., the nation's largest chain of drive-in restaurants, today announced that, with the conclusion of its fiscal year ended August 31, 2006, the company has posted twenty consecutive years of positive same-store sales. In addition, Sonic noted that its estimated system-wide same-store sales increase for the fourth fiscal quarter ended August 31, 2006, remained within the company's near-term target range of 3% to 5%.
The company also reported that it opened a total of 173 new drive-ins during fiscal 2006, in line with its guidance for the year. Because of the continued strength of Sonic's sales and development program, management remains comfortable with earnings expectations of $0.87 to $0.88 per diluted share for the full fiscal year. Sonic plans to report full results for fiscal 2006 in mid-October.
Commenting on the announcement, Cliff Hudson, Chairman and Chief Executive Officer, said, "We are pleased with the early indications that fourth quarter results showed continued strong momentum in our business. Sonic's top-line growth during the past year reflected our twentieth consecutive year of higher same-store sales and continued expansion of our chain, including four new states. This progress also reflected the ongoing effectiveness of other strategies, including a 16% increase in marketing expenditures to approximately $145 million during the year and a steady stream of new product news to keep Sonic relevant and compelling to consumers, which, in turn, translated into higher average unit volumes and drive-in level profits for our franchisees and partners.
With these proven multi-layered strategies in place and with the exciting prospects of our retrofit program, now underway at our partner drive-ins and scheduled for roll-out to our franchised drive-ins in January 2007, we believe Sonic is well-positioned to carry our fiscal 2006 momentum into the coming year."
In looking ahead to fiscal 2007, Hudson addressed many of Sonic's expectations for fiscal 2007.
However, pending the completion of the company's recently announced tender offer, which is scheduled to expire on September 22, Sonic is not providing an earnings outlook for fiscal 2007 until a determination is made of the number of shares tendered and financing terms are set. Sonic will announce its outlook for interest expense and earnings per share growth once the tender process is complete. Sonic, America's Drive-In, originally started as a hamburger and root beer stand in 1953 in Shawnee, Okla., called Top Hat Drive-In, and then changed its name to Sonic in 1959. The first drive-in to adopt the Sonic name is still serving customers in Stillwater, Okla. Sonic has approximately 3,200 drive-ins coast to coast and in Mexico. More than a million customers eat at Sonic every day.
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