Casey’s president, Darren Rebelez, says the quarter started with good momentum in gas and store sales. “This momentum continued and actually accelerated through the first two weeks in March, with inside same-store says up in the middle single digits and same-store gallons up in the low single digits — excluding the extra day for Leap year. However, in the middle of March, we began to see a rapid decline in our guest traffic,” Rebelez says.
He says the company benefited as gas prices dropped by keeping the price at a point where they made much more on the sale of of each gallon of gas then they made last year. “Fuel gallons were down 34 percent — but were more than offset by an unprecedented average fuel margin of 63 cents per gallon,” according to Rebelez. “Grocery and other merchandise was down nine percent and prepared food and fountain was down 30 percent.”
The company weathered the COVID-19 issues and reported diluted earnings per share of $1.67 for the fourth quarter of its fiscal year ended April 30th, compared to 68 cents for the same period last year. Diluted earnings per share are $7.10 for the year, compared to $5.51 last year.
Rebelez says they made many adjustments to handle the reduced traffic to stores. “Adjusting store hours to meet guest demand to optimize profitability. Expanding third-party delivery opportunities, expanding delivery items beyond prepared foods, expanding online assortment available for sale, and modifying food production to reduce food waste,” Rebelez says.
Rebelez says the drop in gas prices was unique — and allowed them to take more profit on gas sales. “Our average fuel margin in the fourth quarter was 40.8 cents per gallon. Fuel margins peaked around the first of April and moderated throughout the rest of the month,” Rebelez says. “The average retail price of fuel during the fourth quarter was $2.05 a gallon, compared to $2.46 a gallon a year ago. Total gallons sold for the quarter were down ten-point-seven percent to 488 million gallons — while gross profit dollars increased 96 percent.”
Rebelez says many of the states where Casey’s operates have begun to open back up — but Illinois where they have 20 percent of their stores — has not yet lifted restrictions. He made his comments during a conference call for investors.