SANFORD, N.C. -- Hurricane Katrina's toll, for The Pantry Inc., a 1,400-store chain with a large presence in the Southeast, yesterday stood at three convenience stores completely demolished, five others still closed and six stores being run on generator power. The chain also is making blind deliveries to some stores as it struggles to regain regular contact with store managers.
There's no power in the area, said Pete Sodini, president and CEO of the chain. We have no communication in the area. Still, Sodini said during a conference call with investors [image-nocss] and stock analysts that the hurricane has not had a major financial impact on The Pantry.
While the hurricane and its aftermath have been heartbreaking in human terms, its direct financial impact on The Pantry in terms of uninsured property losses or store closings in the affected areas has been minimal, he said. Our business has been affected more broadly by the nationwide disruption of gasoline supplies, but our contractual fuel supply agreements have enabled us so far to keep our stores relatively well-supplied.
The company operates eight stores in Louisiana, 53 in Mississippi and 24 in Alabama, but many of the locations are well inland or not in the direct path of the storm. Three stores were completely destroyed and a fourth was seriously damaged. At the peak of the hurricane, 47 stores were closed due to mandatory evacuations or loss of power. As of yesterday morning, six stores remained closed pending repairs and/or resumption of power.
In his standard fashion, Sodini did not mince words about efforts to get business back on track following the harrowing storm that hit the Gulf Coast on August 29.
About panic gasoline buying by consumers, Sodini said, The first few days were wild. I think it has toned down [since then]. About efforts to work with the Federal Emergency Management Agency (FEMA): [They're] boorish and heavy-handed. About transporting gasoline from stores with a surplus to those running low: Yes, we've done some of that. I'm not sure it's economically feasible, but these are the things you do in an emergency environment. On the future of the three demolished stores: [They] will be rebuilt.All of the company's stores are insured against losses due to property damage and business interruption, subject to a deductible, which in this case is estimated at less than $1 million. In the fourth quarter of fiscal 2004, the company incurred uninsured losses from four hurricanes totaling approximately $4 million.
Headquartered in Sanford, N.C., The Pantry Inc. is one of the largest independently operated convenience store chains in the country, with net sales for fiscal 2004 of approximately $3.5 billion. As of June 30, 2005, the company operated 1,386 stores in 11 states under banners including Kangaroo Express, The Pantry, Golden Gallon, Cowboys, and Lil Champ Food Store.
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