ANKENY, Iowa – Rural America continues to feel an economic pinch, as reflected in general-merchandise and tobacco sales for Casey’s General Stores Inc. falling toward the lower end of its 2%-4% same-store-sales projections for the company’s second quarter.
During its Dec. 10 quarterly earnings call, officials described a period of extremes, with August being unusually strong but October—with thundershowers pervasive during high-traffic weekends—dampening the quarter’s momentum.
The company’s fiscal 2018 guidance for grocery and other merchandise was to increase same-store sales 2% to 4%, with an average margin of 31% to 32%. For the quarter, same-store sales were up 2.5%, with an average margin of 32%.
For cigarettes specifically, Bill Walljasper, Casey's senior vice president and CFO, said a price increase combined with lower, weather-related traffic numbers “permeates across all lines of our business.” However, he did say Casey's general-merchandise numbers—in which tobacco plays a large role—are gaining in market share and trending above national averages.
“We were pleased with the gains in the category in light of the current environment, and we remain optimistic about our long-term growth opportunities as we benefit from the continued rollout of major remodels, replacement stores and new-store openings,” said Terry Handley, president and CEO of Casey’s.
Providing other cigarette-specific insights, Walljasper said that a slow, gradual trend has emerged over the past 12 to 18 months. “People continue to gravitate to [single] packs more than cartons and more to a value [priced] brand than a premium brand,” Walljasper said. “And those are signs that certainly the consumers continue to remain strained.”
Ankeny, Iowa-based Casey's operates more than 2,000 convenience stores in 15 states. It ranked No. 4 in CSP's 2017 Top 202 list of the largest c-store chains in the United States.