Sonic Corp. stock surged more than 9% on Tuesday after the drive-in chain said that its same-store sales and traffic both improved over the summer.
The Oklahoma City-based chain said that same-store sales rose 2.6%. Just about all of that came on traffic, which rose 2.5% in the company’s fiscal fourth quarter ended Aug. 31, according to the company’s preannounced earnings Tuesday.
Cliff Hudson, the 3,600-unit chain’s CEO, said that the company’s improved marketing, new advertising campaign and new products—along with “everyday value”—led to the improved performance.
“Our strategy this summer—focused on winning incremental visits from our customers—resulted in an increase in traffic,” he said. Hudson added that the company rolled out mobile ordering across the system. The company is planning a national order-ahead campaign.
The company’s same-store sales had been lagging in recent quarters amid intense competition and improved performance by many of Sonic’s rivals, notably McDonald’s.
But improving performance, especially earlier in the year, has helped generate some investor enthusiasm at the company. Entering trading on Tuesday, Sonic’s stock was up 30% year to date.
Sonic now expects same-store sales to continue increasing throughout the next fiscal year, which began in September.
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