Upcoming AWS Coverage on Del Taco Restaurants Post-Earnings Results

LONDON, UK / ACCESSWIRE / April 10, 2017 / Active Wall St. announces its post-earnings coverage on Sonic Corp. (NASDAQ: SONC). The Company reported its post-earnings coverage on Sonic Corp. (NASDAQ: SONC). The Company posted its second quarter fiscal 2017 financial results on March 28, 2017. The drive-in chain restaurant topped earnings expectations. Register with us now for your free membership at:

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One of Sonic's competitors within the Restaurants space, Del Taco Restaurants, Inc. (NASDAQ: TACO), reported on March 13, 2017, its Q4 FY16 and FY16 financial results. The Company also provided guidance for FY17. AWS will be initiating a research report on Del Taco Restaurants in the coming days.

Today, AWS is promoting its earnings coverage on SONC; touching on TACO. Get our free coverage by signing up to:

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Earnings Reviewed

For the second quarter ended February 28, 2017, Sonic reported revenue of $100.16 million as compared to revenue of $133,16 million in Q2 FY16. The Company's revenue numbers lagged behind analysts' consensus of $107.3 million. Sonic's system same-store sales decreased 7.4%, which was comprised of a 7.3% same-store sales decline at franchise drive-ins and a drop of 8.9% at company drive-ins.

During Q2 FY17, Sonic's adjusted operating margin improved 50 basis points to 15.8% primarily driven by a 12% year-over-year decline in SG&A and a higher mix of franchise stores. The SG&A decrease was mainly driven by lower incentive compensation accruals as the result of lower same-store sales and profit performance in the quarter.

The Company's drive-in margins contracted by 330 basis points in the reported quarter, food and packaging costs were favorable by 10 basis points as a result of commodity cost improvement, offset by higher discounting and the establishment of the system Brand Technology Fund.

For Q2 FY17, Sonic's net income totaled $11.0 million, or $0.25 per diluted share, compared to net income of $10.8 million, or $0.22 per diluted share, in the same period of the prior year. The Company's earning numbers surpassed market estimates of $0.14 per share.

Cash Flow

As of the end of Q2 FY17, Sonic had $75 million remaining on the $173 million in share repurchase authorization for 2017, and the Company expects to pay a dividend of $0.14 per share per quarter. The Company ended the quarter with $33.9 million in unrestricted free cash. Sonic is expecting free cash flow of approximately $55 million to $60 million this year, with CapEx between $40 million and $45 million.

Outlook

For FY17, Sonic is forecasting same-store sales to be flat to down 2% and adjusted EPS to be flat to down 7%, with a slightly lower tax rate and lower incentive compensation offsetting lower-than-expected Company's drive-in margins. The same-store sales forecast assumes continued negative traffic for the industry and positive check.

Sonic announced that it has moderated its projection for SG&A expense to approximately $81 million to $82 million from $84 million, primarily reflecting lower incentive compensation based on lower same-store sales and profits in the second quarter as well as the timing of some headcount investments. The Company expects free cash flow to be just under $60 million.

Stock Performance

At the close of trading session on Friday, April 07, 2017, Sonic' stock price slightly rose by 0.19% to end the day at $25.81. A total volume of 1.29 million shares were exchanged during the session, which was above the 3-month average volume of 1.04 million shares. The Company's shares are trading at a PE ratio of 19.22 and have a dividend yield of 2.17%. The stock currently has a market cap of $1.09 billion.

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SOURCE: Active Wall Street