The Pantry's Lessening Loss 'Encourages'
Second-quarter fiscal 2013 results reflect stronger fuel margins, despite traffic challenges
CARY, N.C. -- Major southeastern U.S. convenience chain The Pantry Inc., announced a net loss was $6.9 million for its fiscal second quarter ended March 28, 2013, compared to a net loss of $9.7 million in last year's second quarter.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $39.1 million, up from $38.9 million a year ago.
Fuel gross profit was $48.4 million, compared to $43.3 million a year ago as retail fuel margin per gallon increased to 11.7 cents from 9.6 cents in the prior year quarter. Comparable-store fuel gallons sold decreased 7.9%.
Comparable-store merchandise revenue declined 2%, but increased 0.1% excluding cigarettes.
Merchandise gross margin was 33.7%, compared to 33.4% a year ago.
Store operating and general and administrative expenses were $150.5 million, compared to $149.8 million a year ago.
"The second quarter was challenging from a customer traffic standpoint, but fuel margins were stronger than we anticipated. This allowed us to improve adjusted EBITDA to $39.1 million, which was in line with our expectations. Unfavorable weather and weak consumer confidence contributed to a decline in comparable-store traffic. This impacted both our comparable-store merchandise revenue and retail fuel gallons, which declined 2.0% and 7.9%, respectively," president and CEO Dennis G. Hatchell said.
"We were encouraged by the 2.6% improvement in average sales per customer, but disappointed that this was more than offset by a 4.6% decline in traffic inside our stores. We believe that our merchandising initiatives are having a positive impact and are confident they will drive stronger overall performance when customer traffic levels improve," he said.
Based in Cary, N.C., The Pantry Inc. is a leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated convenience store chains in the country. As of May 7, 2013, the company operated 1,567 stores in 13 states under select banners, including Kangaroo Express, its primary operating banner.
For more on The Pantry's retailing strategy, see the May issue of CSP magazine.