Why The Pantry Shares Fell

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of The Pantry were down as much as 15% today after the convenience-store chain posted a second-quarter loss and missed Wall Street estimates.

So what: The southeastern U.S. retailer's profits were improved from a year ago, but The Pantry still posted an adjusted loss of $0.28 a share. Revenue was down 8% to $1.89 billion. Analysts had been eyeing a per-share loss of $0.26 and sales at $1.90 billion. Same-store sales were down 2%; however, the category improved 0.1% when cigarette sales are factored out. CEO Dennis Hatchell blamed the poor results on a 4.6% drop in customer traffic, bad weather, and low consumer confidence.


Now what: The January-March quarter is a seasonally weak one for The Pantry, so the results need to be looked at in that context. The Pantry also closed 35-40 stores, which accounts for the larger drop in revenue. While the company didn't miss estimates by that much, it's disconcerting to see same-store sales and overall traffic down, indicating that the company seems to be headed in the wrong direction. The Pantry saw improvement in fuel margins, the item that makes up the vast majority of its sales, and analysts are still expecting a per-share profit of $0.73 for the year, but with key financial indicators moving in the wrong direction and no competitive advantage, there seems to be little reason to invest.

Stay on top of The Pantry. Add the company to your Watchlist by clicking here.   

The article Why The Pantry Shares Fell originally appeared on Fool.com.

Fool contributor Jeremy Bowman and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum