The Pantry, Inc. (PTRY) has made numerous changes to the company and its operations, hired a new CEO, remodeled stores, and even attracted a modicum of activist investor attention. Yet the company continues to see a steady slide in EBITDA, uses all of its cash flow to service debt and spruce up its stores, and has leveraged up its balance sheet in the process to the point where the firm has little room for error. The Pantry appears to be an obvious short based on declining operating performance, high leverage, and management's apparent inability to stem the deterioration of both the business and the balance sheet.
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