Casey’s Seeing Double
Reports double-digit sales increases across nearly all major grocery, merchandise categories
ANKENY, Iowa -- Casey’s General Stores Inc. saw “significant” sales growth in all major areas of its business, especially in store, said chairman and CEO Robert J. Myers in announcing the convenience-store chain’s latest financial results.
The company reported net income of $79 million for the three months ended Oct. 31, 2015, compared to $49.9 million for the three months ended Oct. 31, 2014.
“Second-quarter inside sales were up 11.6% while total fuel gallons sold were up 7.7%. The positive sales performance, along with a strong prepared food and fuel margin, drove gross profit dollars up 19.3% for the quarter,” he said.
Here is a breakdown of Casey’s results for the period by category:
- Fuel. The company’s annual goal for fiscal 2016 is to increase same-store gallons sold 2% with an average margin of 16.7 cents per gallon. For the second quarter, same-store gallons sold were up 3.3% with an average margin of 24.7 cents per gallon. Casey’s sold 13.6 million renewable fuel credits for $4.7 million during the second quarter.
“Same-store gallons during the quarter continued to benefit from lower fuel prices,” said Myers. “We also experienced a fuel margin well ahead of our annual goal due primarily to volatile wholesale costs during the quarter.”
For the year, total gallons sold were up 7.8% to 997.4 million gallons with an average margin of 21.1 cents per gallon, while gross profit dollars rose 18.5%. Same-store gallons for the year were up 3.3%.
- Grocery & Other Merchandise. Casey’s annual goal for fiscal 2016 is to increase same-store sales 6.2% with an average margin of 32.1%. For the second quarter, same-store sales were up 7.5% with an average margin of 31.5%. It experienced double-digit sales increases across nearly all major areas of this category, resulting in a 10.6% increase in total sales in the second quarter.
“Packaged beverage and tobacco sales continued their solid performance as we expand our cooler capacity throughout our store base and customers trade up to premium brands,” said Myers.
For the six months ended Oct. 31, 2015, same-store sales were up 7.2% with an average margin of 32.1%. Total sales for the year were up 10.3% to $1.04 billion, while gross profit dollars rose 9.0%.
- Prepared Food & Fountain. The goal for fiscal 2016 is to increase same-store sales 10.4% with an average margin of 60.8%. Same-store sales for the quarter were up 9.4% with an average margin of 63.4%. The margin was up 410 basis points primarily due to lower commodity costs compared to the same time a year ago.
“Same-store sales benefited from the continued rollout of our primary store initiatives,” Myers said. “We are optimistic about the future growth in this category especially as we complete the implementation of online ordering later this month in all of our stores. The online ordering service will give our customers the ability to conveniently order pizza, made-to-order sub sandwiches, and appetizers.”
Year to date, total sales were up 14.4% to $452.8 million compared to the first six months last year, and gross profit dollars were up 20.9% to $285.2 million. Year to date, same-store sales were up 9.8%.
- Operating Expenses. Year to date, operating expenses increased 8.7% to $531.6 million. For the quarter, operating expenses were up 9.5%.
“The increase was primarily due to operating 48 more stores this year compared to a year ago in the same period and the continued rollout of various operational initiatives,” said Myers. “These increases were offset by a $1.3 million decrease in the quarter for transportation costs due to lower fuel prices.”
- Expansion. Casey’s annual goal is to build or acquire 75 to 113 stores, replace 10 existing locations and perform 100 major remodels. At the mid-year point, the company had acquired one store and completed 25 new-store constructions. It has also completed 11 replacements and 24 major remodels.
“We are on pace to build approximately 50 stores and remodel 100 stores by the end of the fiscal year,” Myers said. “We will continue to remain patient with acquisitions and remain optimistic about our long-term growth opportunities as our second distribution center becomes operational in February 2016.”
Ankeny, Iowa-based Casey’s owns and operates 1,896 convenience stores in 14 states: Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma, South Dakota, Tennessee and Wisconsin.