The Ankeny-based Casey’s convenience store chain reported strong earnings in the third quarter.
President and CEO, Terry Handley talked about the results in a conference call with investors.”Diluted earnings per share for the quarter were up over 135 percent to $1.13 compared to 48 cents a year ago when you exclude the one-time benefit last year due tax reform. And up over 50 percent year-to-date to $4.83 — excluding the one-time benefit for tax reform,” Handley says.
He says a couple of things figured into the good financial quarter. “The results were primarily driven by the effective control of operating expenses, and a stronger fuel margin compared to the third quarter of last year,” according to Handley. He says their fuel optimization plan and the fuel prices allowed them to make more money off of each gallon sold, despite bad weather in February.
“This effort combined with a favorable fuel margin environment allowed us to achieve an average fuel margin of 22.1 cents per gallon for the third quarter, and drove a 22.2 percent increase in gross profit dollars from the fuel category, compared to the same period a year ago,” Handley says.
The company’s yearly same-store fuel gallons sold were down 1.4%, with an average margin of 20.8 cents per gallon – -but the gross profit increased nearly 14 percent to $364.7 million.
Handley says their prepared food sales for things such as pizza increased due to a variety of factors. “Same store sales were up one-point-five percent. The average margin for the quarter was 62.3% — up 180 basis points from the third quarter last year — primarily due to strategic price increases, product mix shift and favorable commodity prices,” Handley says. “As a result of the increase sales and the margin expansion in the quarter — prepared food gross profit dollars were up to nearly $160 million.”
The company had 2,123 stores at the end of January with 17 stores under agreement to purchase and a new store pipeline of 133 sites that includes 48 stores under construction.
