Sonic reduces its fiscal full-year earnings forecast

Sonic Corp. lowered its fiscal full-year earnings outlook Friday, due to lower-than-expected third-quarter results.

The drive-in restaurant operator now anticipates net income growth of 9 percent to 12 percent, down from its prior 15 percent to 17 percent growth forecast.

Sonic had a 2007 adjusted profit of 96 cents per share, which would imply a 2008 profit of $1.05 to $1.07 per share.

Analysts polled by Thomson Financial predict full-year earnings of $1.11 per share. Estimates typically exclude one-time items.

The company also expects third-quarter systemwide same-store sales to come in below its prior forecast on weak March results.

Sonic anticipates quarterly growth below its 2 percent to 4 percent outlook, as March same-store sales results were "considerably below" a similar forecast.

Sonic also said partner drive-in same-store sales growth was 2 percent to 3 percent lower than the systemwide rate, partly due to the retrofit program being implemented at several franchise drive-ins.

Same-store sales, or sales at stores open at least a year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

In addition, Sonic expects increased commodity and labor costs, a higher tax rate and the absence of a one-time gain to weigh on third-quarter results.