A Sonic drive-in Normal, Ill.
Photograph by Bloomberg via Getty Images
By Lucinda Shen
March 30, 2016

Shares of drive-in fast food chain Sonic (sonc) rose 5% Wednesday after a stellar second-quarter earnings report that beat analyst estimates due to low commodity prices and a wide range of menu items.

On Tuesday Oklahoma City-based Sonic said adjusted earnings rose 38% to $9 million or 18 cents per shares, on revenue of $133.2 million in the period ending Feb. 29. That jumped ahead of analyst estimates of 16 cents a share on $128 million in revenue. Stores sales on average also rose 6.5%.

CEO Clifford Hudson noted that the profit margin widened due to low commodity prices, discounts, and limited-time offers. The chain also has a wide range core products, allowing restaurants to be more flexible.

“It’s very good for us to have this BLADE strategy: breakfast, lunch, afternoon, dinner and evening,” said Hudson, “It really keeps our business healthy and allows us to move around what some of the competition may be focusing on.”

 

Like most other fast-food chains, Sonic is also pushing to add more technology to its ordering process. The company, which began rolling out changes to its systems in 2014, had added digital menu boards and will begin advertising its app in April.

Sonic, which started as a hamburger and root beer stand in 1953, said it expects same-store sales, or sales at locations open more than a year, to grow 4% to 6% in fiscal year 2016. The company has roughly 3,500 stores nationwide.

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