Casey’s CEO Darren Rebelez spoke about the results during a conference call for investors. “We had a tremendous second quarter. Diluted earnings per share rose 36% to $3.00 per share. The results of this quarter were quite well balanced — driven by both stronger fuel margins and higher inside sales volumes and profits than a year ago,” Rebelez says. The good results led the board of directors to increase the dividend 6% to $0.34 per share.
Lower gas prices allowed the company to make more money on gas despite fewer gallons sold. “Fuel gross profit was up 45% compared to the prior year, with a fuel margin of 35.3 cents per gallon. Same-store gallons sold were down 8.6% compared to the prior year due to continued traffic disruptions from the pandemic — though we did see sequential improvement from the first quarter,” he says.
Inside store sales increased 3.5% in the quarter, but prepared foods did not keep pace. “Total prepared food and fountain sales were down three percent to 289 million dollars in the second quarter,” according to Rebelez. “Same-store says were down three-point-six percent. The average margin for the quarter was 60.1% versus 60.9% from a year ago.”
He says the lower customer traffic is to blame for the drop in prepared food sales. “This area of our business continues to be the one most impact by lower guest counts from the pandemic — especially in the morning daypart where many of our guests continue to work from home or deal with virtual schooling arrangements. Bakery and dispensed beverages — especially coffee — are the categories most adversely impacted, though both showed volume increases versus the first quarter,” he says.
Rebelez says pizza sales are the one prepared food item that has not lagged — thanks to increasing online sales. “Whole pies are continuing to perform exceptionally well with units up 17% compared to the same quarter a year ago — aided in part by our digital efforts. Digital sales are up 127%, and make up 50% of total whole pie orders,” Rebelez says.
The acquisition of the 94-store Bucky’s chain located primarily in Illinois and Nebraska is expected to be completed in December and help continue the sales growth of Casey’s.