Drive-in fast-food chain Sonic Corp. said Monday that its net income in its fiscal third quarter rose 3 percent, even as sales dropped, as it trimmed costs and set aside less money for income taxes.
Cold, wet weather in March and April put a damper on sales, the company said. But revenue trends improved during the quarter. A shift to more national advertising also helped sales, CEO Clifford Hudson said in a statement.
Profit came to $14.8 million, or 26 cents per share, in the March-May quarter. That matched Wall Street predictions and was up from $14.4 million, or 24 cents per share, in the same period a year ago.
Revenue fell 2 percent, to $146.6 million. Analysts polled by FactSet expected $147.8 million. Revenue in locations open at least a year, a key retail metric that indicates core operating trends, rose 0.1 percent during the quarter.
Costs also dipped 2 percent, to $116.6 million. The company also spent less on interest on its debt, while its reserve for income taxes fell nearly 6 percent.
Sonic still expects revenue in locations open at least a year to rise by a low-single-digit percentage for the whole of its fiscal year. However, it said that the weak economic recovery may cause "sales volatility."
The company's shares were unchanged in aftermarket trading following the release of the earnings report. The stock closed Monday at $14.19, up 36 percent for 2013.
- Investment & Company Information