Sanford, North Carolina-based convenience store chain The Pantry has posted net income up 12.4% to US$4.1m in its Q3 ended 27 June, and earnings per share (EPS) up 10% to US$0.22, year on year.
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Adjusted earnings were US$4.8m compared to US$5.9m in the Q3 2001, excluding changes in the fair market value of interest rate derivatives reported in FY 2002 and FY 2001, FY 2001 restructuring charges and goodwill amortisation.
“We are encouraged by our Q3 performance despite a competitive marketplace made more difficult by a sluggish economy,” said Pete Sodini, president and CEO: “We were able to report solid earnings and comparable store volume gains in merchandise and gasoline as a result of our efforts to remain competitively priced in gasoline combined with the impact of recent merchandise initiatives and more aggressive promotional execution.”
Total revenues were US$681.3m compared to US$708m year on year, impacted by an 11.7% decline in average gasoline retail prices; however, merchandise revenue, gasoline gallon volume and commission revenue all increased, by 4.7%, 4.4% and by US$1.3m, respectively.
Total gross Q3 profit was US$127m, compared to US$128.8m year on year. The gross profit decline reflects a lower gasoline margin than reported in the Q3 2001; however, the Q3 2002 gasoline margin of 11.1 cents per gallon was in line with company expectations for the H2 2002.
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By GlobalDataOperating, general and administrative expenses were up 0.6% at US$93m, however as a percent of sales, adjusted for gasoline retail price deflation, they fell to 12.6% from 13.1% in the Q3 2001. EBITDA was US$34m, compared to US$36.3m in the Q3 2001.
Pete Sodini commented: “In the Q3 2002, we continued to refine our marketing efforts to communicate everyday value in key destination categories supported by an aggressive promotional calendar. Our solid merchandise performance, the contributions from the South Carolina lottery and the comparable store volume impact of a consistent, competitive gasoline pricing philosophy nearly offset the effect lower gasoline margins had on gross profit and EBITDA compared to the Q3 2001.”
The Pantry continues its focus on closing under performing locations and said it expects to close around 37 stores in FY 2002, finishing the year with around 1,289 operating locations. During the Q3, the company reduced its outstanding debt by another US$6m and is in line to pay down principal by about US$40m in FY 2002.
Sodini concluded: “As economic and world crude market challenges continue, our focus will remain on the business fundamentals within our control.”
