Ankeny-based convenience store chain Casey’s saw a 30% increase in earnings for each share in the first quarter of this fiscal year.
CEO Terry Handley talked about the results during a conference call today. “The results were primarily driven by operating 105 more stores stronger fuel margins from the first quarter last year, reductions of hours worked inside the stores, benefits of tax reform, and share repurchases,” Handley says.
The diluted earnings per share rose 44 cents to $1.90 cents a share. He says they’ve focus more on managing fuel prices and saw a half-a-percent increase in the amount they made for each gallon sold in the quarter. “This increase focused enabled us to achieve a higher average fuel margin of 20.5 cents per gallon for the quarter — and drove a 13.1% increase in gross profit dollars from the fuel category,” Handley says. He says they also saw an increase in the sales of products inside the stores.
“In the grocery and other merchandise category — total sales were up nearly 8% — to 644-point-eight million dollars in the first quarter,” according the Handley. “Same store sales were up three-point-two-percent during the quarter, slightly above our annual guidance as packaged beverages exceeded expectations and cigarettes performed well during the period.” The average margin on the sales of groceries and other merchandise was 32.4%. Handley says the sales of prepared food such as pizza and fountain drinks were up 1.7% in the quarter with a margin of 62%. The C-E-O says they will continue working on the expansion of fuel selections and the managing of prices.
“During the quarter we converted an additional 592 stores to biodiesel and 78 stores to premium or diesel. By the end of Q-2 we will add one of these products to 344 additional locations,” Hadley says. ” Biodiesel, regular diesel and premium fuel all carry a significantly higher margins than other fuel products. We believe these will have a positive impact to our overall fuel margin going forward.” Handley says they are moving forward with their “value creation plan” activities and have hired vendors for their fuel and inside store price optimization plans.
“Price optimization will allow us to leverage the sales data generated by our broad network of stores combined with market data to make centralized rules-based pricing decisions at the pump and in the store — which will improve sales and margin in every category throughout our network.” Handley says they will start using the price optimization at select stores and then slowly add it to other stores throughout the year.
The company had 2,085 stores at the end of the fiscal year July 31st, with 14 stores under agreement for aquisition. The company also has a land bank of 103 sites for possible new stores.