Sonic Shares Tumble After Analyst Cuts Sales Estimate

Sonic Corp. fell the most in more than two months after Stephens Inc. cut its forecast for the drive-in burger chain’s same-store sales, citing a broader weakness in the fast-food industry.

Sales at Sonic’s established locations may rise 4.5 percent in the quarter through May, down from a previous estimate of a 5.5 percent gain, Stephens analyst Will Slabaugh said in a note Friday. Slabaugh maintained his estimate for third-quarter earnings of 44 cents a share and continues to rate the shares overweight, the equivalent of a buy.

While Sonic’s new menu items and value deals have succeeded in drawing customers, “we believe that April was a choppier month for all industry players,” Slabaugh said, citing recent commentary from executives at rivals such as Burger King owner Restaurant Brands International Inc.

Sonic fell as much as 6.4 percent to $32.22 in New York, the biggest intraday decline since Feb. 18. Shares of the Oklahoma City-based company had climbed 6.6 percent through Thursday.

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