Sonic (SONC) Stock Plunges on Q3 Sales Warning

NEW YORK (TheStreet) -- Sonic (SONC) stock is falling 5.01% to $30.90 on heavy trading volume on Wednesday morning after the drive-in restaurant chain said comparable store sales for the fiscal 2016 third quarter are expected to be below guidance.

The Oklahoma City-based company estimates comparable store sales will be positive for the quarter ended March 31, but below its outlook of a 4% to 6% increase.

The weaker same store sales, which measures the sales performance for drive-ins opened for at least 15 months, were driven by "slower industry traffic and modestly unfavorable weather during the quarter," the company said in a statement.

Adjusted earnings per share for the full fiscal year are still expected to increase by 20% to 25%.

Additionally, Sonic's board approved an extra $155 million for the share buyback program, in addition to the more than $21 million still remaining for the previous plan.

So far today, 1.42 million shares of Sonic have been traded, compared with its average daily volume of 1 million shares. 

Separately, Sonic has a "buy" rating and a letter grade of B- at TheStreet Ratings because of the company's solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and expanding profit margins.

You can view the full analysis from the report here: SONC

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.