ANKENY, Iowa -- Despite what he described as a "challenging quarter," Casey's General Stores Inc. president and CEO Robert J. Myers finds reason for optimism.
Casey's has reported net income of $39 million for the first quarter of fiscal 2013 ended July 31, 2012, compared to $39.4 million for the same quarter a year ago. It reported total revenues of $1.87 billion, down from $1.874 billion.
"This quarter, we completed 26 major remodels, added pizza delivery to 50 locations and converted 26 stores to 24-hour operations," said president and CEO Robert J. Myers. "Fiscal 2013 is going to be an exciting year for Casey's as we continue to roll out these operational initiatives."
For gasoline, the company's annual goal is to increase same-store gallons 1% with an average margin of 14 cents per gallon. For the first quarter, same-store gallons sold were down 0.2% with an average margin of 14.9 cents per gallon.
"Gas margins are performing in-line with our expectations," said Myers. "The excessively hot weather adversely impacted several areas of our business, including gasoline gallons sold." Total gallons sold for the quarter were up 3.7% to 394.1 million gallons.
For grocery and other merchandise, Casey's annual goal is to increase same-store sales 6.2% with an average margin of 32.7%. For the quarter, same-store sales were up 2.6% with an average margin of 33.4%.
Casey's experienced a one-time gross profit benefit of approximately $3.5 million due to a change in the Illinois cigarette tax.
"Customer traffic was impacted by the adverse weather mentioned above as well as a challenging cigarette market," said Myers. "Although cigarette sales are down, we are very pleased with the sales growth within the rest of the category, especially beer and beverages." Total sales for the quarter were $386.1 million and gross profit rose 8.5% to $128.8 million.
For prepared food and fountain, Casey's goal for fiscal 2013 is to increase same-store sales 11% with an average margin of 61.1%. For the first quarter, same-store sales were up 10.6% with an average margin of 63.5%.
"Prepared food sales continue to benefit from the operational initiatives ... and should improve throughout the year as we add those initiatives to more stores," said Myers. "The margin benefited from reduced commodity costs, especially cheese and coffee."
Total sales for the category were up 15.2% to $142.7 million, and gross profit increased more than 19.4% to $90.6 million.
For the first quarter, operating expenses were $189.4 million compared to $171.4 million for the first quarter a year ago, up 10.5%.
"Lower retail fuel prices helped keep credit card fees and fuel expense relatively flat," Myers said. "Wages were up 12% primarily due to the increase in the number of stores operating 24 hours, pizza delivery and operating 33 more stores than a year ago."
In terms of expansion, the company's annual goal is to increase the number of stores by 4% to 6%. Casey's opened one new-store construction and three replacement stores. It did not acquire any stores during the quarter.
"Although it was a relatively quiet quarter we still expect to meet this goal by the end of the fiscal year," said Myers.
The company currently has 18 new stores under construction and 27 stores under written agreement to purchase.
Based in Ankeny, Iowa, Casey's is a leading independently owned convenience store chain in the Midwest and one of the largest in the country. It owns an operates approximately 1,700 stores in 11 states.