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    Casey's Fourth Quarter Report Touts Gains

    For the fiscal year, same-store sales were up 7.3 percent with a margin of 33.1 percent, but company missed mark on expansion plans.

    ANKENY, Iowa -- Casey's General Stores, Inc. fourth quarter earnings of its fiscal year, which ended on April 30, 2008, underscored sustained growth.

    "We ended fiscal 2008 with a 17.6 percent increase in total gross profit and a 37.2 percent increase in net earnings," president and CEO Robert J. Myers said in a released statement. "These results show the value of adhering to our long-term strategic plan and at the same time, having the flexibility to adapt to a changing business environment."

    Sticking to its mission of increasing same-store gasoline sales, the report noted that sales realized a 2 percent increase with an average margin of 10.7 cents per gallon.

    "Our longstanding policy of pricing with local competition has won us customer loyalty over the years," Myers said in a released statement. "High retail prices meant customers bought fewer gallons per visit in fiscal 2008, but same-store customer counts remained positive. Same-store gallons sold were down 2 percent from a year ago with an average margin of 13.9 cents per gallon."

    The report noted that total gallons sold were up 1.8 percent, and gasoline gross profit rose to $168.9 million.

    Casey's increased its grocery and general merchandise same-store sales by 4.3 percent, with an average margin of 32.2 percent. For the fiscal year, same-store sales were up 7.3 percent with a margin of 33.1 percent. Total sales rose 10.5 percent to $942.7 million, and gross profit was up 11.9 percent to $311.9 million, the report noted.

    Myers said the growing popularity of high-margin beverages contributed to gains. "The gross profit improvement is even more impressive in light of the previous year's total reflecting a one-time benefit related to cigarettes that came to $4.8 million," he said.

    Casey's surpassed its year-end goal of increasing prepared food and fountain by 8.4 percent by announcing that same-store sales reached 9.8 percent. Total sales were up 12.8 percent to $301.6 million, while gross profit grew 13.4 percent to $187.9 million.

    "This category continues to perform exceptionally well," Myers said in a released statement. "The strategic price increases we were able to take throughout the year and refinements to each store's daily food production plans helped us extend our positive trends."

    Operating expenses were outpaced by gross profit growth, which rose 15.6 percent mainly due to a rise in credit-card fees, wages and insurance claims, explained Myers. "The company and the industry felt the impact of customers' more frequent use of credit cards to pay for gasoline and the higher fees that resulted from rising retail prices," Myers stated. "We are encouraged that our rate of increase in operating expenses slowed in the fourth quarter."

    Casey's did miss its marks with regards to the expansion plans it released last year that included acquiring 50 stores and building 10 new stores. In total, the company acquired 12 stores and built none.

    "Acquisition activity was constrained by inflated seller expectations," Myers noted. "We will continue to seek attractive properties at reasonable prices and will resume building stores in the coming months. Senior vice president Sam Billmeyer, a 16-year veteran of the company, recently assumed leadership of store development and will oversee the rollout of our new store design."

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