The chief financial officer for the Ankeny-based convenience store chain Casey’s General Stores says the company expects to increase sales in the new fiscal year that started in June, despite some increases in costs. CFO Bill Walljasper says overall sales for the just ended fiscal year were up just over 7 percent.
Inside sales of prepared foods like pizza, coffee and pop were up 13-percent. Walljasper says they want to increase those in-store sales by nearly 10-percent this year, but face some increases in the cost of things like cheese. “We expect a flat to a slightly up cheese cost environment for the fiscal year. Another component though for those that follow meat toppings — meat has risen dramatically over the last 3 to 4 months. It’s up 20 to 30 percent,” Walljasper says.
The company had earlier increased prices to offset some of the increased costs and Walljasper says that is something they will continue to monitor to help maintain their margins. “I receive on a monthly basis competitive price surveys, certainly we are always looking for opportunities in that regard,” Walljasper says. “And there may be another mid-year price increase potential.” The company’s margin on the prepare food was 61.1 percent. The goal this year is to keep the margin at 60-percent.
Walljasper says they’ve tried to increase the value of the products along with the increase in price. “For instance on the pizza slice — that was one of the components where we did increase price — we increased the size of that slice to add greater value as we also increased the price of that,” Walljasper explains. “So we do some things like to try to bring value to the customer.” The financial report from the company says they have set a goal to increase same-store fuel gallons sold by 1 percent, and increase grocery & other merchandise sales by 5.3- percent.
Walljasper says they believe they are in a good position heading into the new fiscal year. “The economy in the midwestern states that we operate in is doing relatively well compared to the rest of the country. And certainly we wouldn’t be taking price increases if we felt there was an elasticity issue that would be in effect,” Walljasper says. “And so, even though we have taken some price increases, they are still very competitive in our market area,”Walljasper says.
In the just completed fiscal year, the company saw earnings of $135 million or $3.46 a share. That compares to the previous year where the company earned $111 million or $2.86 a share.
Casey’s operates more than 1,800 stores. In the last fiscal year the company built 44 new stores, acquired 28 stores, completed 20 replacements and 25 major remodels. The company expects to build or acquire 72 to 108 stores and replace 25 existing locations in this fiscal year.