The Pantry Releases Third Quarter Results


Pantry Inc. has announced its financial results for its third fiscal quarter ended June 25, 2009.


The Pantry’s net income for the quarter totaled $43,000 or $0.00 per share, down from  $10.7 million ($0.48 per share on a diluted basis) in the third quarter of 2008.


The company reported that its EBITDA totaled $48.0 million, compared with $66.1 million a year ago. Net cash provided by operating activities equaled $41.0 million, down from with $60.0 million in the third quarter of 2008. Results for last year’s third quarter included $0.04 per share in losses on gasoline hedging positions.


Meanwhile, the company reported that merchandise revenues had increased 0.5% overall and 0.2% on a comparable store basis from 2008. The merchandise gross margin was 35.0%, down from 36.5% a year ago, mainly because of the tax increase on tobacco products. Total merchandise gross profit for the quarter totaled $151.1 million, down 3.5% from the same period last year.


Retail gasoline gallons sold in the quarter were up 0.3% overall and down 0.5% on a comparable store basis, the company reported. Excluding diesel gallons, comparable store gallons sold increased 1.4% from a year ago. Total gasoline revenues declined 41.2%, mainly because of a  40.4% year-over-year decrease in the average retail price per gallon, to $2.21.


The retail gross margin per gallon was 9.3 cents, down from 10.7 cents last year. Total gasoline gross profit for the quarter was $50.0 million, down 13.0% from a year ago.


Total store operating and general and administrative (G&A) expenses were $153.2 million, up 3.3% from the prior year. Store operating expenses of $125.4 million were down 0.6% from a year ago, while G&A expenses of $27.8 million were up $5.6 million, or 25.2%. Of the $5.6 million year-over-year increase in G&A expenses, $4.6 million was related to real estate gains and losses, CEO transition costs and the accelerated vesting of stock-based compensation.


“During the quarter we experienced a weak gas margin due to a sharp rise in wholesale gasoline costs,” said Chairman and CEO Peter J. Sodini. “While our retail gas margin was below average for the quarter, the year-to-date margin was still strong at 15.3 cents per gallon and we believe we remain on target for a full-year gas margin well above our long-term average and in line with our previous guidance. Third quarter results were also affected by the ongoing economic softness in our markets and by higher tobacco excise taxes.”


The archive of The Pantry’s third quarter earnings conference can be accessed at or until Aug. 11, 2009. 



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