Remodeled Fresh Stores Could Prove Important Catalyst For PTRY
Analysts at William Blair & Co reiterate their "outperform" rating on The Pantry Inc (NASDAQ: PTRY).
At conference with PTRY on June 17th, according to William Blair & Co, “The top priority for The Pantry is the company’s fresh initiative, as management’s long-term goal is to achieve prepared food penetration higher than the industry average of 17% of in store sales… The first remodeled “fresh” stores opened earlier this month and, if results are encouraging, we believe this could be an important catalyst for the shares.”
“IT systems are also being upgraded, and the consolidation of The Pantry’s four point-of-sale (POS) systems down to two is now complete. With more visibility into consumers’ baskets, The Pantry now believes it should be able to run more-profitable promotional campaigns…. By eliminating low-value-added activities at corporate, management is able to invest more in merchandising and store operations infrastructure that can drive sales,” the analysts mention.
William Blair adds, “The Pantry has two years left on its existing contract with BP, but has been discussing its relationship with the embattled oil company in recent weeks, which we estimate may result in some concessions to the retailer.”
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