The Pantry shares rose 7 percent Tuesday after the Cary convenience store chain reported strong fiscal fourth-quarter earnings Tuesday that handily beat Wall Street profit estimates.
Excluding the impact of impairment charges, the company reported fourth quarter net income of $15.4 million, or 66 cents per share, compared with net income of $1.4 million, or 6 cents per share, in the second quarter of 2013.
The consensus among analysts who cover the company had been net income of $10.78 million, or 44 cents per share, according to Bloomberg. Total revenue was $1.955 billion, slightly below the $1.988 billion forecast by analysts.
The Pantry operates 1,513 stores in the Southeast, primarily under the Kangaroo Express brand.
The company has been working to offset declining gasoline and cigarette sales by offering more proprietary foods in its stores and remodeling its aging stores and adding quick-service restaurants, such as Subway or Taco Bell, to complement its convenience stores in some locations.
The Pantry opened 20 such restaurants at its stores this fiscal year, and plans to open 30 next year.
Comparable store merchandise revenue increased 2.5 percent in the fourth quarter, with the average sale per customer increasing 4.5 percent. For the year, comparable store merchandise revenue was up 2.6 percent.
“We have now had positive comparable store merchandise sales in 11 out of our last 12 quarters,” CEO Dennis Hatchell said in a statement.
Fuel gross profit during the quarter was $57.7 million, up from $47.8 million during the same period a year ago. Comparable store fuel gallons sold were down 2.5 percent.
The Pantry shares closed Tuesday at $27.28, up $1.82. The stock is up 62 percent this year.