Inside Sales Drive Casey’s Strong Q1 Numbers

Casey’s annual goal is to increase same-store sales 5.8% with an average margin of 32.8%, and to grow it’s store count by 4-6%.

Casey’s General Stores Inc. is off to a strong start in fiscal 2012 strong with a “record quarter.” 

The c-store chain has reported basic earnings per share of $1.04 for the first quarter of fiscal 2012 ended July 31, 2011 compared to $0.73 for the first quarter a year ago. Basic earnings per share were up 28.4% after adjusting the prior year’s results for fees associated with the hostile takeover attempt by Alimentation Couche-Tard Inc.

The increase is due in part to operating 132 more stores this quarter versus last year’s first quarter, said President and CEO Robert Myers. “The features of the new store design are proving to be very popular with our customers and are driving inside sales. We will continue to incorporate these features in our new store construction, replacements, remodels, and acquisitions.”

Gasoline – The Company’s annual goal is to increase same-store gallons 1% with an average margin of 13.5 cents per gallon. For the first quarter, same-store gallons sold were down 2.7%, however the average margin was 17.2 cents per gallon.

“The average retail price of fuel increased over 39% from last year, which adversely impacted same store gallons sold,” said Myers. “Fortunately the gas margin environment continues to be strong.” Total gallons sold for the quarter were up 6% to 380.1 million gallons.

Grocery and Other Merchandise – Casey’s annual goal is to increase same-store sales 5.8% with an average margin of 32.8%. For the quarter, same store sales were up 6.2% with an average margin of 32.5%.

“Operating more stores as well as favorable weather enabled us to achieve a 15.1% increase in grocery and other merchandise sales,” stated Myers. “However, margins are still being impacted by a competitive cigarette market and a shift to larger pack purchases for beer.” Total sales for the quarter were $365.2 million and gross profit rose 14.1% to $118.7 million.

Prepared Food & Fountain – The goal for fiscal 2012 is to increase same-store sales 7.7% with an average margin of 61.8%. For the first quarter, same store sales were up 15.3% with an average margin of 61.2%. Commodity pressures, particularly cheese and coffee, caused the margin shortfall.

“The addition of made-to-order sub sandwiches and expanded coffee continues to enhance prepared food sales,” said Myers. “We have both of these programs in approximately 20% of our store base right now and are looking to add more.” Total sales for the category were up 21% to $123.8 million, gross profit increased over 16% to $75.8 million.

Operating Expenses – For the first quarter, operating expenses were $171.4 million compared to $152.4 million for the first quarter a year ago. Operating expenses increased 17.3% after adjusting prior year’s expenses for the $6.2 million in legal and advisory fees associated with the hostile takeover attempt. “Operating more stores along with a $7.8 million increase in credit card fees and fuel expense combined were very impactful to operating expenses,” stated Myers.

Expansion – The Company’s annual goal is to increase the number of stores 4-6%. Casey’s acquired 27 stores and completed two new store construction projects in the first quarter, bringing the store count to 1,665.

“Our disciplined acquisition strategy has enhanced shareholder value over the years,” stated Myers. “We will continue this diligent approach to future store growth and are optimistic about achieving this year’s goal.” The Company also has 15 new stores under construction and six stores under written agreement to purchase.

Dividend – At its September meeting, the Board of Directors declared a quarterly dividend of $0.15 per share. The dividend is payable Nov. 15, 2011 to shareholders of record on Nov. 1, 2011.

 

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