Net income rose 9% to $16.4 million from $15.1 million in the same period last year, or 27 cents per diluted share compared 24 cents, a 14% increase.The chain absorbed a 2-cent charge for stock compensation expense. Total revenues grew 12% to $159.8 million $142.2 million for the same period last year, driven by Sonic's system-wide same-store sales growth of 4.7% during the quarter over an increase of 8.1% last year. Specifically, same-store sales in the first quarter increased 5.1% at franchise drive-ins and 3% at partner drive-ins, while core markets posted an increase of 5% and developing markets achieved an increase of 3.5%.
The chain estimates that drive-in closings related to the hurricanes trimmed approximately 1% from first quarter revenues. All but eight of Sonic's affected drive-ins were open by the end of November; therefore, the chain is not expecting any continuing impact from the hurricanes.
Sonic's chairman, president and CEO Clifford Hudson attributes the growth to an increased average check amount throughout the day. The chain's advertising initiatives and continued expansion of its business in non-traditional day parts such morning, afternoon and evening, rather than the traditional day parts of lunch and dinner are driving much of the growth. He said during the company's earnings call that Sonic will increase its media expenditures from $125 million in fiscal 2005 to approximately $145 million this year, with the network cable portion comprising approximately 50%.
During the quarter, the chain opened 33 new drive-ins, including 30 franchisees and acquired 15 franchise drive-ins in September 2005. And, although recent hurricanes have temporarily affected the pace of development in the Gulf Coast region, the chain still plans to open 180 to 190 new drive-ins in fiscal 2006, including 150 to 160 by franchisees. Today, Sonic has over 3,000 drive-ins in the United States and Mexico.
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