ANKENY, Iowa -- Casey's General Stores Inc. has reported earnings for the fourth quarter and the fiscal year ended April 30, 2008. For the quarter, earnings per share from continuing operations were 28 cents; for the year, they totaled $1.68. "We ended fiscal 2008 with a 17.6% increase in total gross profit and a 37.2% increase in net earnings," said president and CEO Robert J. Myers. "These results show the value of adhering to our long-term strategic plan and at the same time having the flexibility to adapt to a changing business environment."
Casey's annual goal was to increase same-store [image-nocss] gasoline gallons sold 2% with an average margin of 10.7 cents per gallon. "Our longstanding policy of pricing with local competition has won us customer loyalty over the years," said Myers. "High retail prices meant customers bought fewer gallons per visit in fiscal 2008, but same-store customer counts remained positive. Same-store gallons sold were down 2% from a year ago with an average margin of 13.9 cents per gallon." Total gallons sold were up 1.8%, and gasoline gross profit rose to $168.9 million.
For grocery and other merchandise, the company's goal was to increase same-store sales 4.3% with an average margin of 32.2%. For the fiscal year, same-store sales were up 7.3% with a margin of 33.1%. Total sales rose 10.5% to $942.7 million, and gross profit was up 11.9% to $311.9 million. The growing popularity of high-margin beverages was a significant contributor to the gains. "The gross profit improvement is even more impressive in light of the previous year's total reflecting a one-time benefit related to cigarettes that came to $4.8 million," Myers added.
For prepared food and fountain, the annual goal was to increase same-store sales 8.4% with an average margin of 62%. Fiscal 2008 same-store sales grew 9.8%, and the average margin was 62.3%. Total sales were up 12.8% to $301.6 million, and gross profit grew 13.4% to $187.9 million. "This category continues to perform exceptionally well," said Myers. "The strategic price increases we were able to take throughout the year and refinements to each store's daily food production plans helped us extend our positive trends."
Casey's goal was to hold the percentage increase in operating expenses to less than the percentage increase in gross profit. Though operating expenses were outpaced by gross profit growth, they grew 15.6% mainly due to a rise in credit-card fees, wages, and insurance claims. "The company and the industry felt the impact of customers' more frequent use of credit cards to pay for gasoline and the higher fees that resulted from rising retail prices," Myers said. "We are encouraged that our rate of increase in operating expenses slowed in the fourth quarter."
In terms of expansion, the goal was to acquire 50 stores and build 10 new stores. The company acquired 12 stores and built none. "Acquisition activity was constrained by inflated seller expectations," Myers explained. "We will continue to seek attractive properties at reasonable prices and will resume building stores in the coming months. Senior vice president Sam Billmeyer, a 16-year veteran of the company, recently assumed leadership of store development and will oversee the rollout of our new store design."
Myers shared four corporate performance goals for fiscal 2009: Increase same-store gasoline gallons sold 2% with an average margin of 10.8 cents per gallon; increase same-store grocery and other merchandise sales 7% with an average margin of 33.2%; increase same-store prepared food and fountain sales 6.8% with an average margin of 61.6%; and increase the total number of stores 4%.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.