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IBDvalueinvestin (98.35)

SONC taking advantage of recession and Expanding



June 24, 2009 – Comments (2) | RELATED TICKERS: SONC

Sonic opened 34 drive-ins during the quarter. It expects to open 130 to 135 drive-ins during its 2009 fiscal year.

Just posted .27 eps this qtr, which is only a penny lower than last year when it was trading in the mid-teens.

2 Comments – Post Your Own

#1) On June 24, 2009 at 10:20 AM, IBDvalueinvestin (98.35) wrote:

Someone asked me how they are taking advantage of recession?

The answer is easy, real estate and leases signed during a recession are at basement bargain prices. So the best time to expand is during a recession. Then you selloff your lower performing stores during a bull run.

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#2) On June 24, 2009 at 11:19 AM, lemoneater (57.10) wrote:

From a totally ancedotal perspective, the hot weather we are having in the south should only help the store traffic. However, we usually get our from 2-4pm when the drink are half off so I don't know whether the store makes a good margin on our purchases. The lemon-berry slush is wonderful, and the java chiller has to be tried to be believed. Disclosure I do not own stock in this company yet.

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