Sonic Declines After Drive-In Burger Chain Lowers Sales Forecastby
Sonic Corp., the drive-in burger chain known for its rollerskating carhops, declined as much as 9.1 percent in late trading after cutting its sales forecast.
The company now expects same-store sales to increase 2 percent to 4 percent this year, compared with an earlier prediction of as much as 6 percent. Sonic maintained its earnings growth forecast of 20 percent to 25 percent.
“The consumer environment has weakened,” Sonic Chief Executive Officer Cliff Hudson said in a statement.
Sonic is contending with an increasingly competitive restaurant industry. Newer fast-casual companies are vying for customers, and older chains have responded by ramping up discounts and promotions. Grocery chains also are aiming to attract more diners with prepared meals.
Sonic’s shares tumbled as low as $27.60 in extended trading. Even before the decline, the stock was down 6 percent this year.
The company posted a same-store sales gain of 2 percent last quarter. That missed the 2.4 percent estimate of analysts, according to Consensus Metrix. Still, earnings came in at 43 cents a share, excluding some items, which was better than the 42-cent projection.