Casey’s Chief Financial Officer Bill Walljasper says increased expenses for labor were part of the reason for the lowered earnings. The company failed to meet its goal for increasing the sale of prepared foods. He says the continued storms in October were a big reason.
“We experienced on the weekends significant thunderstorm activity and rainstorms,” Walljasper says. “That may not sound like a severe weather pattern — but when roughly about half to 60 percent of our pizza sales are on the weekends — and you have customers who just don’t get out because of the weather patterns, that will affect us on a short-term basis.” He says they also do around 45 percent of their other in-store sales on the weekends.
He says the weather patterns hit Iowa, Missouri and Illinois the hardest, and that is 75 percent of their store base. “Typically in the winter months those storms we get are more isolated to the northern region, this just happened to be a little bit further sweeping,” he says. Prepared foods sales were up a little more than two percent in the quarter when the company expected an increase of four to six percent. Walljasper says the weather impact this quarter was the opposite of last year when there was a record warm November that got more people out.
He says that was the strongest prepared food month of the year and may’ve been the strongest for in-store sales as well. Walljasper says they saw a pick up in business this year in November as the weather went from cold to unseasonably warm, and he says the weather patterns seem to be favorable as December begins. Gas sales increased in the quarter, and Walljasper says a combination of factors have kept gas sales strong.
“Obviously in our market area there’s really no alternative for public transportation, so customers continue to have to go to and from work. We continue to add stores in key locations, which I think is taking market share for us. Obviously we have a fuel program that’s different from some of our peers — that also is helping out,” according to Walljasper.
Walljasper says they’ve been able to take advantage of volatility in the fuel market to make nearly 20 cents on each gallon of gas sold in the quarter. Their margin so far for the fiscal year is 19.5 cents for each gallon of gas sold, with their gross profit on gas sales was up 11.7 percent.