ANKENY, Iowa -- Casey's General Stores Inc. has reported 55 cents in earnings per share from continuing operations for the second quarter of fiscal 2008 ended Oct. 31, 2007. For the same quarter a year ago, earnings were 34 cents per share. Midyear earnings came to $1.13 per share versus 68 cents per share for the first half of fiscal 2007.
President and CEO Robert J. Myers said, "We had exceptional performance inside our stores from grocery and other merchandise and prepared food and fountain. Year to date, gross profit on inside sales rose 17.9% to $272.4 [image-nocss] million."
Gasoline: Casey's fiscal 2008 goal is to increase same-store gasoline gallons sold 2% with an average margin of 10.7 cents per gallon. Actual same-store gallons sold were down 1.6% for the second quarter and down 0.8% as of midyear. Total gallons sold were up 3.9% for the quarter and up 5.8% to 626.8 million for the year to date. The average margin was 13.6 cents per gallon for the quarter and 14.7 cents for the year to date. Midyear gasoline gross profit was up 61.4% to $92 million.
"Throughout the first six months, a favorable market environment kept our average margin unusually high," said Myers. "Same-store gallons were slowed by prices at the pump and measured against difficult comparisons from a year ago; nevertheless, our same-store customer count continued to be positive."
Grocery & Other Merchandise: The annual goal is to increase same-store sales 4.3% with an average margin of 32.2%. Same-store sales were up 11.2% for the second quarter compared with a 3.5% increase for the second quarter last year and up 9.9% for the year to date compared with a 2.7% increase for the first half of fiscal 2007.
"We are very pleased with the gains we've achieved in this category," Myers said, "especially in light of the higher retail gasoline prices."
For the year to date, the average margin was up 109 basis points to 33.5% on total sales of $509.9 million. Myers continued, "Growth came from increased sales of higher-margin beverages and the improved match between product mix and customer demand." Gross profit increased 19.4% to $171 million for the six months.
Prepared Food & Fountain:The annual goal is to increase same-store sales 8.4% with an average margin of 62%. Same-store sales were up 10.6% for the quarter and up 10% as of midyear. For the six months, the average margin was 62.4% on total sales of $154.6 million. Midyear gross profit was up 15% to $96.4 million.
Myers said, "Gross profit increased due to strong fountain sales, strategic price increases, and the continued utilization of point-of-sale information."
Operating Expenses: It is the company's ongoing goal to hold the percentage increase in operating expenses to less than the percentage increase in gross profit. As of midyear, operating expenses were up 18.1% while total gross profit was up 26.4%.
Myers elaborated on the positive results: "We are encouraged by our performance in the first half of the year, especially inside our stores, because it demonstrates our management of gross profit and expenses to maximize earnings."
Expansion: Casey's goal is to acquire 50 stores and build 10 new stores by April 30, 2008. At midyear, the company had not built any new stores and had acquired 5 stores.
"Acquisition activity tends to come in waves," said Myers. "We are seeing seller expectations higher than what we believe are acceptable purchase values. As always, our focus is on making the right purchase decisions and driving return on invested capital. We currently have written agreements for eight stores, and we remain optimistic about long-term opportunities."
Dividend: At its December meeting, the board declared a quarterly dividend of $0.065 per share. The dividend is payable Feb. 15, 2008, to shareholders of record on Feb. 1, 2008.
Also at the meeting, Ronald M. Lamb announced his retirement as an executive officer of the company effective April 30, 2008. He has been employed by Casey's for over 37 years, most recently as chairman of the Executive Committee. He will continue to serve as chairman of the board.
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