ANKENY, Iowa -- Casey's General Stores Inc. has reported earnings for the fourth quarter and the fiscal year ended April 30, 2007. For the quarter, earnings per share from continuing operations were 36 cents; for the year, they totaled $1.26.
We had four excellent quarters inside our stores, but the gasoline environment was difficult for much of the year, said president and CEO Robert J. Myers. The closing quarter's earnings were well above the 22 cents we reported for the same period a year ago because of solid gains in all three of our business categories [image-nocss] and a one-time benefit within grocery and other merchandise.
Without the one-time benefit, fourth-quarter earnings from continuing operations would have been 30 cents.
Gasoline: Casey's annual goal was to increase same-store gasoline gallons sold 2% with an average margin of 10.8 cents per gallon. By year-end, Casey's had increased same-store gallons sold 1.4% and averaged a margin of 10.4 cents per gallon. We were encouraged that retail prices were more responsive to rising wholesale costs in the fourth quarter, said Myers. Our margin improved significantly, and gallons sold were up as well.
Grocery & Other Merchandise: The company's annual goal was to increase same-store sales 3.9% with an average margin of 32.2%. For the fiscal year, same-store sales rose 4.6% with a margin of 32.7%. Management attributed the year's sales gains to heavier store traffic and improved product mix. The average margin was positively affected by a one-time benefit related to cigarettes. Without the one-time benefit, the average margin would have been 32.1%. This category's performance has improved significantly over the past three years, added Myers, and we are confident there are more benefits to be derived from point of sale and analysis of the data it provides.
Prepared Food & Fountain: The annual goal was to increase same-store sales 7.9% with an average margin of 63.4%. Annual same-store sales were up 11%, well above goal. The average margin was 62%. The margin shortfall was due primarily to the higher cost of goods sold that resulted from switching to a dual cola program. The additional fountain choices contributed to this category's excellent performance in fiscal 2007, but the real star was our proprietary prepared food program, said Myers. We kept the warmers full of the right product at the right time of day and were rewarded with another year of impressive gross profit improvement.
Operating Expenses: The annual goal was to hold the percentage increase in operating expenses to less than the percentage increase in gross profit. Gasoline performance slowed the increase in total gross profit to 10.9%, Myers said. Expenses rose 13.4% primarily due to a 31.1% increase in bank fees for customers' credit card charges plus higher wages and utilities.
Expansion: Casey's annual goal was to acquire 50 stores and build 10 new stores. We actually acquired 52 and built 8, said Myers. We were particularly pleased with the HandiMart stores we purchased in October.
At April 30, 2007, the company had seven signed agreements for acquisitions, giving a head start on fiscal 2008's expansion goal.
Fiscal 2008 Goals:
Increase same-store gasoline gallons sold 2% with an average margin of 10.7 cents per gallon. Increase same-store grocery and other merchandise sales 4.3% with an average margin of 32.2%. Increase same-store prepared food & fountain sales 8.4% with an average margin of 62%. Hold the percentage increase in operating expenses to less than the percentage increase in gross profit. Acquire 50 stores and build 10 stores.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.