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ANKENY, Iowa -- Casey's General Stores Inc.’s earnings were up 91.3 percent from 23 cents per share for the same quarter a year ago. The company reported 44 cents in earnings per share from continuing operations for the second quarter of fiscal 2006 ended Oct. 31, 2005. Earnings from continuing operations year to date were 89 cents per share compared with 55 cents at the previous midyear.
"At the six-month mark all three of our business categories were exceeding annual goals for sales and margins, giving the company a 27.9 percent increase in total sales and a substantial gross profit gain of 19.9 percent," said Ronald M. Lamb, chairman and CEO.
In gasoline, Casey's annual goal was to increase same-store gasoline gallons sold by 2 percent with an average margin of 10.5 cents per gallon. On a same-store basis, gallons sold in the second quarter were up 4.3 percent with an average margin of 13.9 cents; for the year to date, they were up 6 percent with an average margin of 12.8 cents. Gross profit for the six months rose 30.1 percent to $72.1 million.
Lamb explained that extraordinary market conditions existed during the second quarter. "Hurricane activity caused considerable volatility in wholesale gasoline costs. We adhered to our consistent policy of pricing with the competition and made gains in same-store sales and margin," Lamb said.
In grocery and other merchandise, the annual goal was to increase same-store sales 3 percent with an average margin of 31.5 percent. The same-store sales increase was 4.5 percent for the quarter with an average margin of 33.2 percent and 6 percent for the year to date with an average margin of 32.6 percent. The six-month gross profit grew 14.7 percent to $135.1 million. "Our strategic focus on aligning product mix with customer demand served us well," Lamb said, "and the lottery has become a destination item drawing additional customers to our stores."
For prepared food and fountain, the annual goal was to increase same-store sales 5.5 percent with an average margin of 60.5 percent. For the quarter, same-store sales were up 4.5 percent with an average margin of 64.6 percent. For the six months, same-store sales were up 5.9 percent with an average margin of 64.3 percent. The year-to-date gross profit was $74.3 million, a 19 percent increase. "We drove sales and margins by matching menu items to customer preferences, introducing new products and controlling sales," Lamb said.
Casey’s annual goal is to hold the percentage increase in operating expenses to less than the percentage increase in gross profit. Operating expenses year to date were up 11.1 percent to $183 million. "Thanks to our sound management strategies, the 19.9 percent increase in gross profit to $284.4 million far surpassed the percentage increase in expenses," Lamb said.
The company is in the final stages of completing the Gas 'N Shop purchase agreement. "We're excited about the Gas 'N Shop additions," Lamb said, "and we'll begin re-branding the sites to Casey's General Stores as soon as the transaction is closed. Our team has also targeted numerous individual competitor stores and other regional chains as potential future acquisitions."
The company's annual goal is to acquire 30 stores (in addition to the Gas 'N Shop acquisition) and build 10 new stores. As of Oct. 31, Casey's had built seven stores, acquired 14 and signed written agreements to buy five more.