Investing.com -- Shares in Sonic Corp (O:SONC) fell slightly in after-hours in spite of posting strong results in its first quarter of fiscal year 2016 on Tuesday, when the fast-food company reported better than expected revenue and earnings.
For the company's first quarter, which ended in late-November, Sonic finished with revenues of $146 million amid same-store sales increases of 5.3%. As a result, Sonic reported net profits of $12.5 million or earnings of 0.24 per share, up from $10.9 million or 0.18 per share in the same period last year. In terms of net income per diluted share, Sonic reported a 33% spike to 0.24, as company's drive-in margin improved by 140 basis points.
"Our solid business momentum continues with another quarter of robust same-store sales," said Cliff Hudson, Sonic Corp. CEO. "Improvements in core menu items, combined with limited-time-offer promotions, drove healthy same-store sales growth of 5.3% for the system during the quarter, building upon 8.5% same-store sales growth in the prior-year quarter."
"We saw particularly strong top line contribution from two premium chicken products and targeted value offerings. The combination of sales leverage, a favorable cost environment and technology-driven cost savings generated another quarter of meaningful incremental profits at the company drive-in level," Hudson added.
The stellar quarterly release on Tuesday came one day after Sonic announced plans to continue with its expansion throughout California, with the addition of two new franchise agreements for a total of 33 new drive-ins in the state over the next seven years. The new drive-ins will be located in the Los Angeles, Palm Springs and Bay Area regions, Sonic said in a statement.
Sonic also said Tuesday in its forward outlook that it forecasts earnings per share growth between 16 and 20% for Fiscal Year 2016, as a whole.
"Looking forward, we believe our technology initiatives will be key contributors to driving sales, profits and new unit development," Hudson said.
Shares in Sonic inched down 0.25 or 0.80% to 31.18 in after-hours trading.