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DALLAS -- 7-Eleven Inc. reported that core earnings, which exclude non-operating items, grew to $43.9 million for the quarter ended Sept. 30, 2004. This compares to core earnings of $39.3 million for the third quarter of 2003. Third quarter net earnings for 2004 were $44.9 million, compared to net earnings of $25.9 million in the same quarter a year ago.
Total revenues for the third quarter grew 10.8 percent to $3.3 billion. Total merchandise sales for the quarter increased 5.4 percent to $2.1 billion. This growth was driven primarily by a 4.2 percent increase in U.S. same-store merchandise sales, on top of a 3 percent increase in the third quarter of 2003. Among the categories that contributed to the merchandise sales increase were hot and cold beverages, fresh food, beer and cigarettes.
"This quarter marked our 32nd consecutive quarter of increased U.S. same-store merchandise sales. Higher gasoline prices put continued pressure on the disposable income of consumers, but our focus on offering greater value through proprietary and private-label products resulted in improved merchandise sales," said Jim Keyes, president and CEO of 7-Eleven Inc. "Additionally, innovative new products are adding variety and choice to our traditional and fresh food businesses. More convenient and value-oriented service offerings are also contributing to our improving operating performance."
For the third quarter, merchandise gross profit grew 7.5 percent to $770.8 million. Merchandise gross profit margin was 36.17 percent, or 71 basis points higher than the prior-year quarter. The increase in merchandise gross profit margin is primarily attributable to the acquisition of the American Express ATM portfolio and, to a lesser extent, a shift in product mix.
7-Eleven grew total gasoline gallons 5.2 percent to 576.5 million gallons for the third quarter. Gasoline revenues for the quarter were $1.1 billion compared to $896.6 million in the same quarter a year ago. The 22.7 percent increase in gasoline revenues is due to an increase in average retail gasoline prices year over year, as well as a 4 percent increase in per-store gallon sales. The average retail price of gasoline was $1.91 in the third quarter of 2004, compared to $1.64 in the third quarter of 2003.