Earnings for the Iowa-based Casey’s General Stores convenience store chain were up 23 percent in its first quarter — and that’s a record for the company.
“We are off to a good start toward achieving our goals in Fiscal 2016,” Bill Walljasper, chief financial officer for Casey’s, said this morning during a conference call for investors. “…The primary reasons for the earnings increase are strong sales throughout the company and margin expansion in our prepared food category.”
Casey’s saw an eight percent increase in the number of gallons of gas it sold in May, June and July compared to the same period last year. The “margin” or profit on each gallon was 17.5 cents. Casey’s saw a 10 percent increase in the sale of groceries and other merchandise inside its stores. There was an even larger increase of nearly 15 percent in sales of prepared food, like Casey’s pizza, fountain beverages and hot coffee.
“The prepared food margin benefitted from lower commodity prices in the quarter relative to a year ago, primarily from cheese and coffee,” Walljasper said this morning. “Our average cost of cheese is locked in through December of 2015 at $1.89 per pound compared to $2.27 per pound in the first quarter a year ago.”
Operating expenses were up compared to the same quarter last year, but less than the previous quarter. Walljasper said that’s because it cost less to buy gasoline and, since gas prices were lower, the company’s credit card transaction fees were lower, too.
“The majority of the increase in the quarter was due a rise in wages, primarily related to operating 50 more stores in the quarter compared to the same time period a year ago as well as from an expansion of our operational initiatives,” Walljasper said.
Casey’s has been reporting higher sales as it moved to keep more stores open 24 hours a day and expanded its pizza delivery service. And some Casey’s stores now offer walk-in coolers with a larger selection of beers, including imports and even microbrews.