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Sonic's Super Stock

Friday, 4 Jan 2008 | 8:03 PM ET
Sonic CEO on Food Biz
An outlook on the restaurant business, with Cliff Hudson, Sonic chmn., president & CEO and Mad Money host Jim Cramer.

Darden’s been declining for a month now, and Wendy’s , along with rivals like McDonald’s and Burger King , took a hit Friday after disappointing same-store sales by the Queen of Old-Fashioned Hamburgers sparked worries on the Street about consumer spending. But not all fast-food chains are struggling.

Sonic actually beat analyst estimates by a penny this morning despite an 11% drop in first-quarter profits. Cramer attributed the drive-in chain’s success to price increases and innovation.

That innovation came in the form of a happy-hour campaign, offering half-priced drinks every afternoon from 2 to 4. A national advertising push boosted sales and increased traffic at Sonics across the U.S., carrying the restaurant through October and November, which were tough months for the sector.

As good as things seem to be for Sonic, “this is a challenging environment for all of us,” CEO Cliff Hudson admitted to Cramer. So his goal is to find the right mix of pricing, products and services to counteract conditions in the market. “And I think to date, we seem to have found the recipe,” Hudson said.

Cramer agreed. If Homegamers want to own a restaurant stock, “you buy Sonic right here.”

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

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