Updated from 10:24 AM.

Sonic (SONC)  shares rose 5.15% to $27.55 on Thursday after the drive-in restaurant chain reported better-than-expected earnings and same-store sales for the 2017 fiscal first quarter, even as revenue missed estimates.

The Oklahoma City-based company posted adjusted earnings of 24 cents per share, topping analysts' expectations of 21 cents per share. System same-store sales dropped 2% during the period, which was better than the FactSet consensus for a 2.4% decline. Revenue for the period was $129.6 million, lower than analysts' estimates of $130.6 million.

The company blamed a "sluggish" consumer landscape and strong prior-year performance for the results. "Although the business faces even tougher sales and margin hurdles in the second fiscal quarter, we remain optimistic in our ability to show sequential same-store sales and profitability improvement beginning in the second half of fiscal 2017," CEO Cliff Hudson said in a statement.

Jefferies analysts said that though Sonic face a tough competitive environment, the company is making progress on its initiatives. Management sees the second half of the year re-accelerating as it benefits from revised promotional strategies, product innovation, pricing action and easier comparisons, the analysts noted.

"As expected, the company did not provide intra-quarter same-store sales trends, but based on comments reflecting on the difficult comparisons and reiteration of guidance for a 2H-weighted recovery, we think trends remain sluggish and likely end up sequentially softer in F2Q (ended Feb)," the analysts wrote in a note.

For fiscal 2017, Sonic forecasts system same-store sales between flat and down 2%. Analysts are modeling a full-year decrease of 0.7%, according to FactSet.

Deutsche Bank research analyst Brett Levy also said Sonic is making progress on its technology initiatives, such as with mobile and display kiosks.

"We believe restaurant companies that are investing in their tech effort to improve operations, potentially drive sales and learn more about/reach its guests are likely building more robust infrastructures for future prospects and potential gains," Levy added.

While he is optimistic about Sonic's tech focus, the company is still in the early stages as its next generation digital functionalities, such as mobile order and pay, are still in early tests and roll out, with some expansion planned in the spring and summer.

Levy, who rates Sonic "hold," believes the quick service restaurant industry's focus on value promotions and offerings may continue to represent challenges to a Sonic rebound. However, he has a favorable view of the company's technology investments and refranchising efforts. 

More than 2.62 million of the company's shares traded today compared to its average 30-day volume of 883,084 shares.