The Pantry Net Income Down in Third Quarter Fiscal 2012
Comparable-store merchandise revenue increased 3.6%
Published in CSP Daily News
CARY, N.C. -- The Pantry Inc. reported net income of $14.8 million or 65 cents per share for its fiscal third quarter and nine months ended June 28, 2012, compared to net income of $19 million or 84 cents per share in last year's third quarter.
"We generated $75 million of adjusted EBITDA for our fiscal third quarter, which was at the high end of our expectations," president and CEO Dennis G. Hatchell said. "While pleased with these results, we are focused on improving them over time by implementing our strategic initiatives, such as our store remodel, foodservice and lifestyle merchandising programs" (see Related Content below.)
He added, "Our initiative to improve leverage resulted in a reduction of funded debt during fiscal 2012 of approximately $182 million, including the reductions related to our recent refinancing."
Comparable-store merchandise revenue increased 3.6% (5.7% excluding cigarettes), and merchandise gross margin was 33.5%, compared to 34% a year ago, the company said (total merchandise gross profit for the quarter was $159.7 million, a decrease of $300,000 from the third quarter a year ago).
Fuel gross profit was $67.1 million, compared to $80.1 million a year ago. It decreased 16.3% in the third quarter of fiscal 2012 compared to the same period a year ago primarily due to a reduction in retail fuel margin per gallon to $0.146 from $0.166 a year ago. Retail fuel gallons sold in the third quarter of fiscal 2012 decreased 5% overall and 3.6% on a comparable-store basis as compared to last year's third quarter.
Total store operating and general and administrative expenses for the third quarter were $152.1 million, a decrease of $3.3 million from the third quarter last year. This decrease was due to lower store operating expenses driven by reduced insurance costs, as well as the impact of closed retail stores.
The company had $179.8 million in cash on hand and $126.1 million in available capacity under its revolving credit facilities as of June 28, 2012.
The company's updated guidance ranges for fiscal 2012 reflect the challenges of the current retail fuel environment. Since the beginning of the fourth quarter, wholesale fuel costs have risen sharply and are expected to adversely affect fuel margins.
Based in Cary, N.C., The Pantry is a leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated c-store chains in the country. As of Aug. 6, 2012, the company operated 1,589 stores in 13 states under select banners, including Kangaroo Express, its primary operating banner.