Investing.com -- Shares in Sonic Corp (NASDAQ:SONC) plunged more than 5% in after-hours trading, after the Oklahoma City-based fast-food chain offered a subdued forward guidance in spite of strong quarterly earnings on Monday.
During Sonic's third quarter of the fiscal year which ended in late-May, the company reported a 6.1% increase in same-store sales as margins in its Company drive-ins improved by 100 basis points. Sonic also earned net income of $20.4 million or 0.38 per diluted share in comparison with net income of $16.8 million or 0.30 per diluted share during the same period in 2014.
"We are very pleased with our strong sales and financial performance driven by a healthy mix of traffic and check," Sonic CEO Cliff Hudson said in a statement. "Our results are especially noteworthy given our strong results from the same quarter prior year. New product news in key categories, effective media and a layered promotional strategy are expected to continue to drive our sales in the near term. Technology initiatives designed to provide a more personalized and customized customer experience are also expected to complement our product and media initiatives and drive sales over the next several years."
For the remainder of 2015, Sonic anticipates opening 22 to 27 new drive-in restaurants with drive-in margin increasing by 100 to 150 basis points. Sonic also anticipates having capital expenditures of $35 to $40 million with free cash flow of $70 to $75 million.
Although Sonic expects its initiatives to drive earnings 27 to 29% on an annual basis, it warned that the general "macroeconomic environment" could dampen results.
As a result, shares in Sonic in after-hours trading fell 1.91 or 5.58% to 34.22.