Casey’s Strong 2nd Quarter

A favorable gas margin and strong inside sales, give Casey’s a 15.6% increase in total gross profit for the fiscal Q2 2012.  

Casey’s General Stores Inc. has reported it’s second quarter results for fiscal 2012.

The company reported $0.99 in basic earnings per share for the second quarter of fiscal 2012 ended Oct. 31, 2011 compared to $0.51 for the same period a year ago. Year to date, basic earnings per share were $2.02 versus $1.27 for the same period last year.

After adjusting for costs associated with the hostile takeover attempt by Alimentation Couche-Tard Inc., basic earnings per share last year would have been $0.81 for the quarter and $1.62 year to date.

“We are pleased with the second quarter results, despite the continued challenges impacting our industry,” stated Casey’s President and CEO Robert Myers. “We experienced a favorable gas margin and strong inside sales, resulting in a 15.6% increase in total gross profit. The average gasoline margin for the trailing four years is 14.2 cents per gallon.”

Gasoline—The Company’s annual goal is to increase same-store gasoline gallons sold 1% with an average margin of 13.5 cents per gallon. For the second quarter, same-store gallons sold were down 2.9%, adversely impacted by a 30.9% increase in retail gas prices from the same period a year ago. The favorable gasoline margin environment continued in the second quarter resulting in an average margin of 16.7 cents per gallon. “The average gasoline margin for the trailing four years is 14.2 cents per gallon,” said Myers. For the year, total gallons sold were up 6.1% to 755.9 million with an average margin of 16.9 cents, while gross profit rose 14.6%. Same-store gallons for the year were down 2.8%.

Grocery & 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 rose 5.8% with an average margin of 32.5%. For the fourth consecutive quarter, the Company experienced double digit sales increases across all major areas of this category. As a result, total sales were up 15.8%. “Competitive cigarette pricing continued to impact the margin in the second quarter compared to the second quarter a year ago,” stated Myers. “However, our cigarette margin began to stabilize in the second quarter as we start to cycle against the more competitive landscape that began about a year ago.” Despite the margin pressure from cigarettes, gross profit dollars increased 14.3% for the quarter. For the six months ended Oct. 31, 2011, same-store sales were up 6.0% with an average margin of 32.5%. Total sales for the year are up 15.5% to $723 million.

Prepared Food & Fountain—The goal for fiscal 2012 is to increase same-store sales 7.7% with an average margin of 61.8%. Same-store sales were up 14.2% for the quarter and 14.8% year to date. The average margin for the quarter was 59.5%, down from the same period a year ago, primarily due to a rise in commodity prices. “It is essential to have high quality prepared food offerings at competitive prices to meet the needs of our value oriented customer base,” said Myers. “This focus on our customers enabled us to increase sales by 20.2% and gross profit by 14.1% for the quarter, despite a decline in the margin,” said Myers. Year to date, total sales were up 20.6% to $252.7 million compared to the first six months last year, with an average margin of 60.4%.

Operating Expenses—Year to date, operating expenses increased 12.3% to $343.2 million. For the quarter, operating expenses were up 12.1%. After adjusting for the expenses associated with the unsolicited offer by Couche-Tard in the prior year, expenses increased 18.4% in the quarter and 17.8% at the six month mark. “The increase was driven primarily by operating 128 more stores this quarter and a $5.2 million increase in credit card fees compared to the same period a year ago,” stated Myers.

Expansion—The annual goal is to increase the total number of stores 4-6%. At the mid-year point, the Company had acquired 33 stores and completed eight new-store constructions. “We are on pace to build approximately 30 stores by the end of the fiscal year,” said Myers. “The acquisition environment continues to be active, and we remain optimistic about our long-term opportunities.”

Dividend—At its December meeting, the Board of Directors declared a quarterly dividend of $0.15 per share. The dividend is payable Feb. 15, 2012 to shareholders of record on Feb. 1, 2012.

 

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