Shares of Pantry Inc. (PTRY) plunged Tuesday after the convenience store chain reported a decline in fourth-quarter profit, hurt mainly by impairment charges.
The Cary, North Carolina-based company's profit for the quarter dropped to $3.3 million or $0.15 per share from $8.5 million or $0.38 per share last year.
Pantry recorded impairment charges of $5.1 million for the quarter, compared to $1.2 million last year.
Excluding one-time charges, earnings for the quarter were $8.4 million or $0.37 per share, compared to $9.7 million or $0.43 per share last year.
Revenues for the quarter grew to $2.18 billion from $1.95 billion last year, on higher fuel sales. On average, four analysts polled by Thomson Reuters estimated revenues of $2.21 billion for the quarter.
Fuel sales rose to $1.71 billion from $1.45 billion last year, while merchandise sales dropped to $466.3 million from $501.9 million.
Comparable store merchandise revenues for the quarter decreased 0.8 percent. Merchandise gross margin for the quarter decreased to 33.8 percent from 34.4 percent a year ago.
Looking forward to the first quarter, the company expects merchandise sales between $0.42 billion and $0.43 billion. For the full year 2012, Pantry anticipates merchandise sales between $1.78 billion and $1.82 billion.
Pantry's interim Chief Executive Edwin Holman said, "Fiscal 2012 represents an important transitional period for the company, as we focus on a pricing strategy that is intended to improve merchandise sales growth and align our gasoline volume with industry trends."
Holman also added that "actions are needed to improve our comparable store sales performance."
Holman took over the position of interim CEO after Terrance Marks resigned in August.
PTRY is currently trading on the Nasdaq at $10.57, down $1.30 or 10.95%, on a volume of 0.9 million shares, above the three-month average volume of 0.2 million.
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