The Ankeny-based Casey’s convenience store chain reports record earnings for the fiscal year that just ended. The company reports gross profit was up 12 percent with its earnings per share up 24 percent to $5.73.
Company Chief Financial Officer, Bill Walljasper, says some of the increase was driven by gas sales, which were up 7.4 percent for the fiscal year. The company made nearly 20 cents on each gallon of gas sold, which was above their goal. Walljasper says they use a three-year average to set their fuel margin goal in have only been below their goal twice in the last ten years. Walljasper says their gas margin was helped by the renewable fuel credits known as RINS. He expects the gas prices to stay steady into the next year.
Sales of merchandise in the stores was up by 10 percent for the year and their prepared food sales of things like pizza and subs were up 12.8 percent. Walljasper says the lower fuel prices carried over to in-store sales as customers had more money to spend. “With the differential in fuel price period over period, we are seeing a continued trade up into premium brands of cigarettes –a little bit more carton purchasing versus pack purchasing — and a slight pick up in premium beer and craft beers,” according to Walljasper.
Casey’s completed the construction of 51 new stores, bought 5 stores, completed 11 replacement stores and 102 major remodels in the last year. The company had hope to aquire more stores, but Walljasper says the asking price in the market was too high, so the company waited. “One of the things we are not going to do is just grow for growth’s sake and run out and buy a hundred, 200 stores,” Walljasper says. “Anybody could do that if they had enough money, but it might not be the right thing for the shareholder base.”
Walljasper says one of the keys to future expansion is their new distribution center in Indiana. He says it was up and running in February and the plan was to have 600 stores switched to it this year.
“We did that 600 stores in roughly four to six weeks — so we are way ahead of schedule, we’ve had no hiccups in that, things are running very smoothly,” Walljaper says. “Obviously many of our growth plans are centered around moving east and south to leverage that distribution center.”
The company’s goals for the next fiscal year are to build or acquire 77 to 116 stores, replace 35 existing locations, and complete 100 major remodels.