US convenience store chain The Pantry warned its full-year earnings per share would be down on previous estimates, owing to reduced fuel margins in the fourth quarter.
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The Pantry issued the downbeat forecast for the fiscal year to 27 September last night (27 September)
The company it expects its earnings per share for the fourth quarter also to be below previous forecasts.
“Our merchandise business turned in a solid fourth quarter, with comparable sales above targeted levels and merchandise gross margins improved from the third quarter,” said chairman and CEO Peter J. Sodini. “However, we have not seen the seasonal improvement in gasoline gross margins that we have usually experienced after Labor Day. To the contrary, our gas margins have declined this month, reflecting increased oil and gasoline prices, tight supplies and scattered refinery shutdowns.”
In an effort to reduce operating, general and administrative expenses, the North Carolina-based retailer said it had implemented a restructuring programme aimed at reducing expenses by at least $6m in the 2008 fiscal year, which will necessitate a one-time charge in the fourth quarter of the current fiscal year.
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By GlobalDataSodini said that while the company regretted the “human impact” of the programme, it realised that it “had to be more proactive in the current challenging environment to ensure that we can deliver the leverage we need on our operating, general and administrative expenses”.
