Quarterly Call Quiet on The Pantry's Brewing Board Battle
After brief statement, Hatchell focuses on first-quarter fiscal 2014 results at hand
Instead of elaborating on the upcoming board election, he used the call more traditionally to discuss the company's performance for its fiscal first quarter ended Dec. 26, 2013.
It reported a net loss of $5.1 compared to a net loss of $3.1 million in last year's first quarter. Adjusted EBITDA was $42.4 million, down from $48.9 million a year ago.
Comparable store merchandise revenue increased 3.5%. Merchandise gross margin decreased to 33.5% from 34.3% in the prior-year quarter driven by promotional activity and sales mix.
Fuel gross profit was $48.7 million, compared to $49.2 million a year ago as comparable-store fuel gallons sold declined 4%. This was partially offset by retail fuel margin per gallon increasing $0.004 over the prior-year quarter to $0.118.
"We are obviously not satisfied with our fuel comp results, and we are working to improve our volume one market at a time with competitive and consistent pricing," Hatchell said.
Store operating and general and administrative expenses were $154 million compared to $147.2 million a year ago, as The Pantry upgraded its stores and incurred "significant" upfront training costs to support staffing realignment related to the Affordable Care Act.
"We gained further momentum in merchandise sales during the first quarter as comparable sales grew 3.5%, our strongest result since the third quarter of fiscal year 2012," said Hatchell. "Our 4.1% increase in sales per customer drove this growth as inside customer traffic levels stabilized. These encouraging results were supported by continued progress upgrading our store base. During the first quarter, we opened one new store, completed 28 remodels and added four new QSRs."
Concerning acquisitions, Hatchell said, "We've had several presented to us, and we're analyzing all of those. And basically, any others that don't fit into our market strategy and our approach strategy, we're not entertaining going after those. So that limits, obviously, how many are available. But we do have several in our current markets that are of interest. They're not very large, but they're of interest to us."
As of Jan. 30, 2014, the Cary, N.C., company operated 1,537 stores in 13 states under select banners, including Kangaroo Express, its primary operating banner. Its stores offer a broad selection of merchandise, fuel and ancillary products and services designed to appeal to the convenience needs of consumers, including fuel, car-care products and services, tobacco products, beer, soft drinks, self-service fast food and beverages, publications, dairy products, groceries, health and beauty aids, money orders and other services. In all states, except Alabama and Mississippi, it also sells lottery products. As of Dec. 26, 2013, it operated 221 quick-service restaurants and 252 of its stores included car wash facilities. It sells self-service fuel at 1,526 locations, of which 1,024 sell fuel under major oil company brand names including BP, CITGO, ConocoPhillips, ExxonMobil, Marathon, Shell and Valero.