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Sonic shares plunge in after-hours trading as company reports slower 3rd-quarter sales

Shares in Sonic Corp. plunged more than 6 percent in after-hours trading Thursday after the Oklahoma City company missed third-quarter revenue expectations and sales growth projections.  

In the company's third fiscal quarter, Sonic reported net income declined to $15.4 million, or 31 cents per share, down 18 percent from the same period a year ago. 

Same-store sales grew 2 percent systemwide for the quarter. The company opened 16 new franchise drive-ins during the quarter.

New refranchising initiative

Also Thursday, the company announced a new refranchising initiative to move toward a roughly 95 percent franchised system by the end of fiscal year 2017. 

About 90 percent of Sonic's 3,500 drive-in locations are franchisee-operated. 

Sales were slower in April and May in part because of bad weather, but the decline also reflects an overall slowing in the market, Sonic CEO Cliff Hudson said during a conference call Thursday. 

"While the consumer environment has weakened, Sonic remains focused on delivering one of the most differentiated customer experiences in the quick-service industry," Hudson said. 

The overall fast-food industry is experiencing a slowdown, Sonic Chief Financial Officer Claudia San Pedro said during the call. 

"We are in a more volatile consumer market and we have less visibility," San Pedro said.

Brianna Bailey

Brianna Bailey joined The Oklahoman in January 2013 as a business writer. During her time at The Oklahoman, she has walked across Oklahoma City twice, once north-to-south down Western Avenue, and once east-to-west, tracing the old U.S. Route 66.... Read more ›