Casey’s Earnings Increase 23%

Casey’s General Stores Inc. reported $0.34 in basic earnings per share for the third quarter of fiscal 2010 ended Jan. 31, 2010, compared to $0.28 for the same quarter a year ago.

Year to date, basic earnings per share were $1.87 versus $1.38 for the same period last year.

“The acquisition environment has become more favorable during this fiscal year,” said president and CEO Robert J. Myers. “We surpassed the 1,500 store milestone in the third quarter as we were able to close on several small multi-store transactions.”

Gasoline – The Company’s annual goal is to increase same-store gasoline gallons sold 2% with an average margin of 11 cents per gallon. For the third quarter, same-store gallons sold were down 2.9% with an average margin of 12.4 cents per gallon. “We continue to experience a favorable gasoline margin environment,” said Myers. “However, in the quarter the average retail price of gasoline was up over 45% to $2.52 per gallon compared to $1.73 a year ago. This disparity, combined with adverse weather throughout the Midwest, impacted gallons sold.” For the year, total gallons sold were up 2.8% to 969.3 million with an average margin of 14.2 cents. Same-store gallons for the year were down 0.2%.

Grocery & Other Merchandise – Casey’s annual goal is to increase same-store sales 8.9% with an average margin of 33.9%. For the quarter, same-store sales were up 1.7% with an average margin of 32.7%. For the nine months, same-store sales were up 3.4% with an average margin of 33.7%. “Sales were impacted by customers trading down to less-expensive products, and our margin softened due to the increased contribution of lower-margin items relative to total sales of the category,” stated Myers. “That impact, along with the harsh weather affected the performance of this category.” Total sales for the year are up 5.8% to $816.1 million.

Prepared Food & Fountain – The goal for fiscal 2010 is to increase same-store sales 7.5% with an average margin of 62%. Same-store sales were up 1.4% for the quarter and 3.8% year to date. “Despite the poor weather during the quarter, we were able to drive gross profit nearly 8% due to an increased contribution from higher-margin items such as pizza and fountain,” Myers explained. The margin for the quarter was up 100 basis points to 62.8%. Year to date, total sales were $276 million compared to $254.6 million with an average margin of 63.7%.

Operating Expenses – At the nine month mark, operating expenses were up 3.2%. For the quarter, operating expenses rose 7.5%, driven by increases in credit card fees and fuel expense. These two expenses combined were up $3.6 million in the third quarter. “The increases in credit card fees and fuel expense were due to higher fuel prices during the third quarter,” said Myers. “Without these increases, expenses would have been up about 4.5% compared to the same period a year ago.”

Expansion – The annual goal is to increase the total number of stores 4%. At the end of the third quarter, the company had acquired 20 stores and completed 10 new-store constructions. “We are encouraged with the acquisition activity in the third quarter and have written agreements for an additional 15 locations that we anticipate closing on by the end of the fiscal year,” said Myers. “We remain optimistic about long-term growth opportunities.” The company has also replaced 18 stores during the first nine months of the year.

Dividend – At its March meeting, the Board of Directors declared a quarterly dividend of $0.085 per share. The dividend is payable May 17, 2010 to shareholders of record on May 3, 2010.

SOURCE: BusinessWire




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