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DALLAS – 7-Eleven Inc. (SE), the world’s largest convenience store operator, said Tuesday that its second-quarter profit jumped 22 percent as a result of higher sales and cost controls.
The company earned $57.2 million, or 45 cents per share, in the three months ended June 30, up from $47 million, or 38 cents per share, a year ago. Its said its core earnings — which exclude a number of non-operating items — totaled $55.3 million, or 44 cents per share, up from $48.1 million, or 39 cents per share, a year ago. Excluding only an accounting adjustment, 7-Eleven said it would have earned 46 cents per share.
The results beat analysts’ expectations for profit of 43 cents per share, according to a Thomson Financial poll.
Revenue rose 9 percent to $3.43 billion from $3.14 billion, as higher gas prices boosted pump revenue. Gasoline sales rose 15 percent to $1.25 billion while merchandise sales increased 7 percent to $2.15 billion.
However, gasoline profit was basically flat with a year ago at $90.9 million.
The company’s convenience stores saw a 8 percent increase in gross profit, which 7-Eleven attributed to “favorable changes in mix.”
Merchandise sales at U.S. stores open at least a year rose 5 percent, 7-Eleven said. The strongest-performing categories included fresh food, hot and cold beverages, cigarettes and services, the company said.
Meanwhile, 7-Eleven said it kept tight control over expenses. Costs for operating, selling, general and administrative items accounted for 23 percent of sales, down from 24 percent a year ago. After adjusting for the jump in gasoline revenue, the company said these costs would have equaled about 24.1 percent of sales.
7-Eleven also reaffirmed its full-year earnings outlook of $1.12 to $1.16 per share. Analysts are looking for 2005 earnings of $1.13 per share on sales of $13.16 billion.
7-Eleven operates, licenses or franchises about 26,000 stores in 18 countries.
Shares of the company fell 50 cents, or 1.5 percent, to $33.83 on the New York Stock Exchange (search).