Bear Stearns Lowers Sonic Estimates

Analyst Joseph Buckley says a roll-out of breakfast foods failed to drive sales at Sonic's drive-in restuarants

Bear Stearns lowered its estimates on Sonic (SONC ).

Analyst Joseph Buckley says drive-in restaurant operator's 40 cents earnings per share missed his 41 cents estimate. The 0.3% same-store sales rise missed the company's 1%-3% target, as well as the 1% indicated in a May sales update. He's concerned about the discrepancy between a roll-out of breakfast foods and lackluster same-store sales. Buckley says at the end of March, Sonic completed a roll-out of breakfast foods to the remaining 50% of its drive-in units, which he expected to be a stronger sales driver.

Buckley notes the 44 cents fourth-quarter earnings per share guidance is below his 45 cents estimate, and says June same-store sales are trending below the 1%-3% target. He cut the $1.32 fiscal 2003 (Aug.) earnings per share estimate to $1.30, and cut the $1.56 fiscal 2004 estimate to $1.54.

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