Sonic Corp. (NASDAQ:SONC), the nation's largest chain of drive-in restaurants, today provided a financial update in advance of two conference presentations in June.
The company estimates that systemwide same-store sales for its third fiscal quarter ended May 31, 2018 were approximately flat with the prior-year quarter. The company reiterates its second-half fiscal year 2018 systemwide same-store sales guidance of flat to up 2%. The company also reiterates estimated adjusted earnings per share guidance for fiscal year 2018 of between $1.43 and $1.50.
"Our third quarter same-store sales reflect solid, sequential improvement including a systemwide increase of approximately 2.5% during May," said Cliff Hudson, Sonic Corp. CEO. "Our focus on everyday value and refreshed marketing initiatives are resonating with guests and advancing our efforts to drive traffic and increase sales. We also remain focused on integrating technology into our guest experience with the ongoing rollout of mobile order ahead, making the Sonic customer experience the most personalized in the QSR industry."
New Share Repurchase Authorization
Sonic also announced that its Board of Directors has authorized a $500 million share repurchase program through August 31, 2021, replacing the company’s fiscal year 2018 authorization of $160 million. The company has repurchased approximately $110 million in stock through the end of its third fiscal quarter, leaving approximately $390 million on the new authorization. Share repurchases may be made from time to time in the open market or otherwise, including through an accelerated share repurchase program, under the terms of a Rule 10b5-1 plan, in privately negotiated transactions or in round lot or block transactions.
“With the refranchising of 41 additional drive-ins in two markets during the fiscal third quarter, the Sonic system is now 95% franchised. The Board’s decision to increase and extend the share repurchase authorization reflects our confidence in the company’s ability to leverage our asset-light model to improve results and drive long-term growth and value creation. We believe that Sonic represents a compelling investment opportunity and remain committed to returning capital to shareholders through share repurchases and our ongoing dividend program while continuing to invest in the business,” concluded Hudson.
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