The Pantry Inc. announced financial results for its fiscal second quarter ended March 27, 2014.
Second Quarter Summary:
Net loss was $10.3 million or $0.45 per share. This compares to net loss of $6.9 million or $0.30 per share in last year’s second quarter. Excluding the impact of impairment charges, net loss for the second quarter of fiscal 2014 was $9.8 million, or $0.43 per share, compared to net loss of $6.3 million, or $0.28 per share, in the prior year.
Adjusted EBITDA was $36.2 million, down from $39.1 million a year ago.
Comparable store merchandise revenue increased 2.3% even though challenging weather conditions constrained customer traffic.
Merchandise gross margin improved to 34% from 33.7% in the prior year quarter as packaged beverage and food service mix increased as a percent of merchandise sales.
Fuel gross profit declined to $42.6 million from $48.4 million a year ago as wholesale fuel costs increased during much of the quarter putting pressure on fuel margins. Retail fuel margin per gallon decreased $0.01 from the prior year quarter to $0.107 per gallon. Comparable store fuel gallons were down 3.2% and were also negatively impacted by weather during the quarter.
Store operating and general and administrative expenses were $151.1 million compared to $150.5 million a year ago. Second quarter 2014 expenses included $1 million in proxy contest costs related to our annual stockholders meeting held on March 13, 2014.
The effective tax rate for the second quarter of fiscal 2014 was 31.3% compared to 49.0% in the second quarter of fiscal 2013.
Q2 store portfolio activity included completing seven remodels, adding three new QSRs and closing four stores.
“We were encouraged with our second quarter results even though they were affected by unfavorable weather,” said president and CEO Dennis Hatchell. “Improved merchandising effectiveness drove a 3.6% increase in merchandise sales per customer as well as the 2.3% merchandise comparable store sales growth for the quarter. Despite continued progress inside our stores, lower fuel margins caused the year-over-year decline in Adjusted EBITDA. We remain focused on unlocking the company’s potential as we build on the positive inside sales results and continue our efforts to improve fuel performance.”