Sorry McDonald’s, Sonic Sees Burger King as a Stronger Competitor

While Sonic’s (SONC) sales growth continues to outperform many in the business of selling fast food, it’s seeing one large competitor starting to gain steam. On Monday evening, the burger and ice cream shake joint announced better than expected fourth quarter earnings. Excluding one-time items, earnings per share came in at $0.43, $0.01 higher than forecasts. Same-restaurant sales rose 4.9%, while profit margins expanded about 100 basis points year over year. According to Sonic, it saw solid demand by consumers during all parts of the day, fueled by interest in its limited-time ice cream shakes and boneless chicken wings. ‘Later in the day, evening in particular coming off the summer quarter where our ice cream sales tend to be strong,’ explained Sonic CEO Clifford Hudson in an interview with TheStreet as to what part of the day performed the best and why. It marked an end to a fiscal year where Sonic's same-store sales increased a solid 7.3%. But, Sonic may be forced to deal with a reinvigorated foe in 2016 by introducing sharper promotions and ramping up product innovation. ‘Our read from more private sources is that Burger King seems to be getting some sales momentum with their business, not so much Wendy’s (WEN) and not so much McDonald’s (MCD),’ said Hudson. TheStreet’s Brian Sozzi reports.