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Back in October, Sonic CEO Clifford Hudson explained that the company’s sustained investment in its brand and product awareness would play a big role in heightened customer engagement and customer experience.
That momentum built last year companywide, Hudson said during Tuesday’s fiscal 2016 first-quarter conference call, has continued into the New Year.
“The momentum that we experienced last fiscal year, fiscal 2015, has carried into this fiscal year as well with the first fiscal quarter positive same-store sales of 5.3%, so we are really proud of that continuing growth, the continuing momentum in our business, particularly given that year ago in that first quarter we had an 8.5% same-store sales growth rate,” Hudson said, according to Seeking Alpha. “So business continues on a very positive track and we’re very happy with the results of this first fiscal quarter.”
The momentum and the source of the momentum, Hudson noted, is also a consistent theme.
“As you look at the things that have driven our business over time, this kind of discussion about this flywheel in the last several years, as a matter of fact, the last three years in particular, the National Media piece has had a very positive impact on that and, in the process, driving average unit profit, driving average unit sales and average unit profit, and, in turn, really picking up the development activities of our company as well,” he explained.
For the past three years, Hudson explained that company officials have discussed with their franchise leadership about business goals by the end of the decade: A 2020 average unit volume goal of $1.5 million.
“Our view of this is … very achievable,” Hudson said. “Why do we say that? Because the capacity is already present in Sonic for achieving this. We anticipate in the year we just finished we probably will have one drive-in that did $4 million, a conventional Sonic drive-in, and we have many drive-ins in newer markets going achieving that $1.5 million and more. So with the media, the creative, the new products and that blade strategy, we see ourselves continuing to grow average unit volume, and it is these characteristics that contributed that 5.3% comp in the first quarter, but should also continue to do that quarter-by-quarter going forward.”
What’s more, Hudson said recent product and promotional activities have played a very significant role in continuing to drive that momentum and, in turn, drive the pace and success of the business.
“We’re doing this as you would expect as we have historically by focusing on premium items, but also focusing on value, and value in a Sonic way that has worked fairly well,” he added.
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