The Pantry Comments On Fourth Quarter Outlook

    SANFORD, N.C.--Oct. 4, 2001--The Pantry, Inc. today said it expects a fourth quarter loss before restructuring and other unusual charges to be in the range of $0.03 to $0.06 per diluted share.
    The Company attributed the reduction in earnings expectation to lower margins, primarily gasoline margins. The Company noted the lower gasoline margin is due to a significant rise in wholesale gasoline costs and a subsequent lag in competitive retail price movement.
    Commenting on the Company's announcement, Peter J. Sodini, President and Chief Executive Officer, stated, "While encouraged by dramatically improved comparable gasoline gallons and store merchandise sales, our fourth quarter results reflect a rapid rise in wholesale gasoline costs which started at the end of July and continued through mid-September. During this period, competitive and other market pressures delayed the pass through of these increases at retail and, therefore, we suffered significant gasoline margin erosion. In the later part of September, however, we have seen a material decline in crude oil and related wholesale gasoline costs, and margins have improved as we enter our new fiscal year."
    Mr. Sodini continued, "In this challenging environment, we have adjusted our sales and marketing programs and are aggressively seeking ways to realize additional savings and improve operating efficiencies. As announced earlier, our January 2001 restructuring plan is on track to produce annualized pre-tax savings of approximately $5.0 million. Moreover, we are prudently controlling discretionary spending, while investing in projects designed to enhance our market position and working capital."
    Actual results for the fourth quarter and fiscal year ended September 27, 2001 will be reported on November 15, 2001. The Pantry, Inc. will host a conference call at 10:00 am EST that day which will be broadcast live on the Internet.

    Headquartered in Sanford, North Carolina, The Pantry, Inc. is the leading convenience store operator in the southeastern United States and the second largest independently operated convenience store chain in the country. As of September 27, 2001, the Company operated 1,324 stores in ten southeastern states under approximately two-dozen banners including The Pantry, Handy Way, Lil Champ, Quick Stop, Zip Mart, Kangaroo, Fast Lane, Depot and Big K. These stores offer a broad selection of merchandise, gasoline and ancillary services designed to appeal to the convenience needs of its customers.

    Except for the historical information and discussions herein, certain statements in this release, including results of operations expectations, may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks and uncertainties that could cause actual results to vary materially from the anticipated results. These risks and uncertainties include without limitation, current and anticipated market conditions, merchandise and gasoline margin and volume trends and administrative savings. Other risks and uncertainties are detailed in The Pantry' s filings with the Securities and Exchange Commission, including without limitation, its annual report on Form 10-K and its other periodic reports, including quarterly reports on Form 10-Q and current reports on Form 8-K.