US convenience store operator The Pantry has posted a jump in first-quarter profits, after cheaper gas and oil prices boosted its gas margins.

For the quarter ended 25 December, the company posted earnings of US$39.4m, or $1.77 a share, up from $3.2m, or $0.15 per share, seen in the year-ago period.

The North Carolina-based firm said total gasoline gross profits for the quarter were $130.1m, up from $56.2m a year ago. However, total gasoline revenue for the quarter fell 21.5% to $1.24bn, the company revealed.

Merchandise revenues for the first quarter were down 1.3% overall and 3% on a comparable-store basis, driving a 5.2% drop in merchandise gross profits, which totalled $138.7m.

"The current retail environment remains very challenging and we are taking action in a variety of areas to further reduce operating expenses and to strengthen our merchandise gross margins. The declines in our comparable store merchandise sales and gas gallons this quarter were partly due to gasoline shortages early in the quarter," chairman and CEO Peter Sodini said. 

"We believe our comparable-store merchandise sales and gasoline gallons will improve somewhat as our gasoline gallon comparisons get easier over the remainder of fiscal 2009," he added.

For the current financial year, The Pantry said it expects merchandise revenue of $1.6bn-$1.63bn and retail gasoline sales of 2bn-2.05bn gallons.