ANKENY, Iowa – During its second quarter conference call last week, Casey’s General Stores reported its goals for 2017 regarding fuels, food and store count. 

"The second quarter fuel margin was 6.1 cents per gallon lower than the 24.7 cents per gallon record quarterly fuel margin from a year ago, which impacted the second quarter diluted earnings by approximately $0.52 per share," said Terry Handley, president and CEO. "For the second quarter, gross profit dollars excluding fuel were up 7.5% and total fuel gallons sold increased 7.1%. Given the ongoing challenges in the broader convenience and food service industries, we are pleased with the performance of our stores. In addition, we are well-positioned for future expansion as the number of sites under contract for new-store construction has grown to 84, which is nearly double from a year ago."

For the second quarter, same-store gallons sold were up 3.7% with an average margin above goal at 18.6 cents per gallon. "Same-store gallons sold for the quarter were well ahead of the annual goal as retail fuel prices remained low and the fuel saver programs continued to drive incremental gallon sales," Handley said. "Fuel margin per gallon for the quarter was lower than the same quarter in the prior year due to decreased volatility in wholesale fuel costs." Casey’s sold 17.8 million renewable fuel credits for $15.9 million during the second quarter. For the six months ending October 31, 2016, total gallons sold were up 7.0% to 1.1 billion gallons. Gross profit dollars for the same time period were down 3.3% to $203.5 million primarily due to a lower margin. Year to date, same-store sales were up 3.3% with an average margin of 19.1 cents per gallon.

For grocery and other in-store merchandise, Casey's goal for 2017 is to increase same-store sales 6.2% with an average margin of 32.0%. For the second quarter, same-store sales were up 3.1% with an average margin of 32.0%. “A slowing of in-store traffic and tightening of consumer spending caused by the ongoing pressures in our operating area adversely impacted same-store sales throughout the quarter,” Handley said. "However, the company continues to be an industry leader in same-store sales growth of many key products within the category, including cigarettes."

In the foodservice area, same-store sales for the second quarter were up 5.1% with an average margin of 62.9%. "Consistent with reports from other foodservice operators, we continued to experience a softening of in-store traffic that resulted in same-store sales below our annual goal. Total sales for the second quarter were up 8.3%, while our same-store sales remained consistent with first quarter results," said Handley. "The growth programs continue to provide strong sales lifts, and we are encouraged by the growth in sales coming from on-line orders."

Like most convenience retailers, operating expenses at Casey’s are on the rise. “Both the quarter-to-date and year-to-date increases were in-line with our expectations, and primarily driven by an increase in wages due to operating more stores this year compared to the same period one year ago, the continued rollout of the various growth programs, and wage rate increases,” said Handley. "The company remains committed to offering competitive wages and benefits in an effort to be the employer of choice in our industry."

In 2017, Casey’s plans to build or acquire 77 to 116 stores, replace 35 existing locations and complete 100 major remodels. Through six months, the company built and opened 11 new stores, acquired six stores, completed 12 replacements and remodeled 24 stores. In addition, Casey’s currently has 39 new stores, 22 replacement stores and 37 major remodel stores under construction. "We have made strides in ramping up store growth as the number of sites under contract for new builds continues to accelerate," said Handley. "There has been increased dialogue with acquisition targets compared to a year ago; however, we will remain disciplined in our evaluation of these opportunities. We are excited about the company's future growth."