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The Pantry reports smaller net loss in first quarter

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The Pantry reported a net loss of $2.9 million, or 13 cents, a share in the first quarter this morning.

That was a smaller loss than the $12.2 million, or 54 cents a share, that the Cary-based convenience store chain reported in last year's first quarter.

Excluding impairment charges and loss on extinguishment of debt, the net loss for the first quarter of fiscal 2012 was $2.6 million or $0.11 per share.

That beat the estimate among Wall Street analysts who cover the company. The consensus among analysts was a loss of 34 cents per share.

Interim CEO Edwin Holman said in a release that the company benefited from lower expenses and a better pricing environment.

"As we continue revising our pricing strategy to position the company for the longer term, we remain focused on improving our sales trends, expense management, and debt reduction.”

The Pantry has more than 1,600 stores throughout the Southeast, primarily under the Kangaroo Express brand. Merchandise sales at those stores increased 2 percent in the first quarter.

Sales of retail gasoline was down 7.4 percent on a comparable store basis from last year's first quarter. On a conference call with analysts, Homan said the current environment remains a difficult one for gasoline sales.

"With respect to gasoline, the current environment continues to provide challenges for most retailers, especially in the Southeast United States as evidenced by nine months of decline and miles driven data," he said.

The Pantry's business has been hurt by high gas prices and a bad economy, which have caused consumers to travel less and spend less on merchandise.

In recent quarters the company has also been hurt by its pricing strategy, particularly for gasoline and cigarettes. Those prices have been higher than some competitors, causing the chain to lose market share.

Holman, who was chairman of the company's board, took over from Terrance Marks, who announced in August that he was leaving The Pantry to become CEO of the Hooters restaurant chain.

A recruitment firm has been hired to find Marks' permanent replacement. Holman said today that the board is in the final stages of the candidate selection process.

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About the blogger

Business reporter David Bracken came to the N&O in 2004. He covers commercial and residential real estate. Contact David at 919-829-4548 or e-mail him.
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