As the first quarter of fiscal 2016 concludes, Casey’s finds itself in favorable financial standings.
Casey’s General Stores Inc. has released its diluted earnings per share for the first quarter of fiscal 2016 ended July 31, 2015. This year’s earnings equated to $1.57 per share. This number stands in contrast to the $1.28 per share for the first quarter of fiscal 2015.
“The Company is off to an excellent start to the fiscal year with strong sales, margin expansion in prepared foods and a favorable operating expense environment during the period,” said Chairman and CEO Robert Myers. “Diluted earnings per share increased 23% despite a fuel margin decline of 1.4 cents per gallon compared to the prior year.”
Fuel
The goal for fiscal 2016 is to increase same-store gallons sold 2% with an average margin of 16.7 cents per gallon. For the first quarter, same-store gallons sold were up 3.4% with an average margin of 17.5 cents per gallon. “Same-store sales continue to benefit from low retail fuel prices,” said Myers. “Wholesale fuel costs were volatile throughout the quarter. Our pricing strategy allows our store managers to respond quickly to local price competition, which helped us maintain volumes and achieve a margin above goal.” The Company sold 15.7 million renewable fuel credits for $8 million during the first three months of the year. Total gallons sold for the quarter were up 8% to 501.2 million gallons.
Grocery and Other Merchandise
The Company’s annual goal is to increase same-store sales 6.2% with an average margin of 32.1%. For the first quarter, same-store sales were up 7.0% with an average margin of 32.6%. “Cigarette sales performed well as we experienced volume increases throughout the quarter, especially in our premium brands,” stated Myers. “The grocery and other merchandise margin is slightly over our annual goal, primarily due to the seasonal sales mix we typically experience in the first quarter.” Total sales were up 10.0% to $526.6 million.
Prepared Food and Fountain
The goal for fiscal 2016 is to increase same-store sales 10.4% with an average margin of 60.8%. For the first quarter, same-store sales were up 10.3% with an average margin of 62.5%. “Many of our strategic initiatives are focused on driving sales to this category,” said Myers. “Major remodels, 24-hour conversions, and pizza delivery continue to deliver impressive sales gains, and lower ingredient and supply costs enabled us to expand our margin.” Total prepared food and fountain sales were up 14.8% to $223.4 million, and gross profit dollars grew 19.9% to $139.7 million.
Operating Expenses
For the first quarter, operating expenses were $263.6 million compared to $244.3 million for the first quarter a year ago, up 7.9%. “Credit card fees and transportation costs combined decreased approximately $2.3 million from a year ago due to lower fuel prices,” said Myers. “These reductions were offset by expenses related to operating more stores than a year ago as well as the various strategic initiatives the Company continues to roll out.”