Sanford, N.C.-based Pantry Inc. first-quarter results show the company’s net income is up sharply from the same quarter last year, attributable to declines in oil prices and improved gross margins on gas.
Total gasoline gross profit for the quarter was $130.1 million, up sharply from $56.2 million a year ago, with retail gross margin of 25.8 cents per gallon vs.10.6 cents per gallon last year.
Net income for first-quarter was $39.4 million, up sharply from $3.2 million in last year’s first quarter, the company said.
“These strong results primarily reflect the exceptional declines during the quarter in oil and gasoline prices, which enhanced our gasoline gross margin,” Pantry Chairman and CEO Peter Sodini said. “We are pleased to have generated significant cash flow for the quarter, which enabled us to further strengthen our liquidity position.”
Merchandise revenues for the first quarter were down 1.3% overall and 3% on a comparable store basis from last year’s first quarter. The merchandise gross margin was 35.5%, compared with 37.0% a year ago. Total merchandise gross profit for the quarter was $138.7 million, down 5.2% from the corresponding period a year ago.
Retail gas gallons sold in the quarter declined 5% overall and 7.2% on a comparable store basis, while total gas revenues fell 21.5%, in part reflecting a 16.8% decrease in the average retail price per gallon ($2.43).
“The current retail environment remains very challenging and we are taking action in a variety of areas to further reduce operating expenses and to strengthen our merchandise gross margins,” Sodini said. “The declines in our comparable store merchandise sales and gas gallons this quarter were partly due to gasoline shortages early in the quarter. We believe our comparable store merchandise sales and gasoline gallons will improve somewhat as our gasoline gallon comparisons get easier over the remainder of fiscal 2009.”
The Company reduced its outstanding debt and lease financing obligations by $26.1 million during the quarter. As of Dec. 25, 2008, cash and cash equivalents totaled $254.8 million and the Company also had $136.4 million available under its revolving credit facility.
The Company also announced the following updated guidance ranges for its expected fiscal 2009 performance (excluding potential acquisitions):