Research Desk Line-up: Nathan's Famous Post Earnings Coverage
LONDON, UK / ACCESSWIRE / July 6, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Sonic Corp. (NASDAQ: SONC), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=SONC, following the Company's posting of its third quarter fiscal 2017 financial results on June 22, 2017. United States' largest chain of drive-in restaurants surpassed earnings expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
Get more of our free earnings reports coverage from other constituents of the Restaurants industry. Pro-TD has currently selected Nathan's Famous, Inc. (NASDAQ: NATH) for due-diligence and potential coverage as the Company reported on June 09, 2017, its financial results for its fiscal year and Q4 which ended on March 26, 2017. Register for a free membership today, and be among the early birds that get access to our report on Nathan's Famous when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on SONC; also brushing on NATH. With the links below you can directly download the report of your stock of interest-free of charge at:
For the third quarter ended May 31, 2017, Sonic posted revenue of $123.99 million compared to revenue of $165.24 million in Q3 FY16. The Company's revenue numbers missed Wall Street's forecasts of $124.3 million.
In Q3 FY17, Sonic's system same-store sales decreased 1.2%, which was comprised of a 1.1% same-store sales decline at franchise drive-ins and a decline of 3.2% at company drive-ins. The Company's Franchise revenues increased $1.8 million, or 3.7%, as a result of its re-franchising initiative and net new unit growth, partially offset by same-store sales declines.
Sonic's adjusted operating margin improved 440 basis points to 27.9% in Q3 FY17, driven primarily by a higher mix of franchise stores. Company drive-in margins improved by 40 basis points in the reported quarter mainly driven by its re-franchising effort, partially offset by sales deleverage.
During Q3 FY17, Sonic's labor margin deteriorated by approximately 80 basis points. Sales deleverage and labor inflation combined to drive approximately 115 basis points. Direct labor inflation, excluding the Company's Colorado markets, increased by 3%. Colorado markets experienced an 11% wage inflation, which brought Sonic's total weighted average to approximately 4.5%.
For Q3 FY17, Sonic's net income totaled $18.8 million, or $0.44 per diluted share, compared to net income of $15.4 million, or $0.31 per diluted share, in the same period of the prior year. Excluding non-recurring item, the Company's net income decreased 13% and net income per diluted share was flat at $0.43, ahead of Wall Street's expectations of $0.41 per share.
"Our third quarter results reflect the expected improvement in underlying sales and store profit versus the first half of the fiscal year, driven by a more balanced promotional calendar, including a reinvigorated SONIC Summer Nights promotion featuring our Real Ice Cream Slush," said Cliff Hudson, CEO of Sonic.
Sonic had $45.2 million remaining on the $173 million share repurchase authorization for the fiscal year 2017. Year-to-date, through Q3 FY17, the Company repurchased approximately 4.9 million shares at an average price of $25.95. Sonic also stated its intention to continue to grow the dividend annually from the current $0.14 per share. Sonic ended Q3 FY17 with $52.1 million in unrestricted free cash.
Sonic reiterated its expectations for adjusted earnings per share for the fiscal year 2017 to decline 2% to 5% on a y-o-y basis. The Company is estimating an approximate 2.5% same-store sales decline for the system, 65 to 75 new franchise drive-in openings and drive-in level margins of 15.3%.
Sonic expects to incur capital expenditures of $46 million to $48 million, excluding spending on build-to-suit drive-in development, capital outlays are estimated to be $40 million to $42 million. The Company anticipates generating free cash flow of approximately $55 million to $60 million.
For Q4 FY17, Sonic is forecasting system same-store sales to be flat to down 1.5%. Adjusted EPS for the upcoming quarter is expected to be $0.43 to $0.45.
Sonic's share price finished yesterday's trading session at $26.27, sliding 1.83%. A total volume of 1.20 million shares has exchanged hands, which was higher than the 3-month average volume of 1.05 million shares. The Company's stock price advanced 4.83% in the last three months and 0.69% in the past six months. Shares of the Company have a PE ratio of 17.98 and have a dividend yield of 2.13%. The stock currently has a market cap of $1.13 billion.
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