The 10-second takeaway
For the quarter ended May 31 (Q3), Sonic met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted slightly and GAAP earnings per share expanded.
Margins grew across the board.
Sonic notched revenue of $149.4 million. The 12 analysts polled by S&P Capital IQ looked for revenue of $149.0 million on the same basis. GAAP reported sales were 1.8% lower than the prior-year quarter's $152.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.24. The 13 earnings estimates compiled by S&P Capital IQ forecast $0.22 per share. GAAP EPS were $0.24 for Q3 compared to -$0.08 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 53.7%, 110 basis points better than the prior-year quarter. Operating margin was 20.7%, 160 basis points better than the prior-year quarter. Net margin was 9.6%, 1,270 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $149.0 million. On the bottom line, the average EPS estimate is $0.24.
Next year's average estimate for revenue is $541.6 million. The average EPS estimate is $0.59.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 369 members out of 420 rating the stock outperform, and 51 members rating it underperform. Among 117 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 100 give Sonic a green thumbs-up, and 17 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sonic is outperform, with an average price target of $9.09.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.