Casey’s Earnings Increase Threefold

Jun 14, 2002

Casey’s General Stores reports increased basic earnings for the fourth quarter and for the entire year. Earnings were nine cents per share compared with three cents for the last quarter of fiscal 2001, and 64 cents per share versus 71 cents for the prior fiscal year.

“We achieved the top-line growth we were looking for,” says Donald F. Lamberti, Casey’s chairman. “More gratifying were the recent positive results in gross profit dollars that show us we have reason to be optimistic about greater profitability in fiscal 2003.” Gross profit was up 19 percent to $93.8 million for the quarter and up 8.1 percent to $392.3 million for the year.

Two of the company’s five performance goals for fiscal 2002 were for gasoline: to increase total gallons sold 15 percent and to maintain an average margin of 10.5 cents per gallon. Management attributed the volume growth, up 8.5 percent for the quarter and 15.9 percent for the year, to adding pay at the pump at 467 stores and to matching the competition in aggressive pricing.

Casey’s met its performance goal for inside sales, which were up 14.7 percent for the quarter with a 14 percent increase in gross profit; and up 17 percent for the year. However, margins were 36.9 percent for the quarter, 36.7 percent for the year, lower than its goal to maintain a 38.7 percent average margin, which it attributes primarily to the volatility in the pricing of cigarettes and the high cheese prices. President & CEO Ronald M. Lamb says, “We’ve already implemented several technological initiatives to strengthen margins in fiscal 2003, and on the expense side, we should benefit with the shift from building to buying stores.” At year-end, there were 1,258 corporate stores compared to Casey’s expansion goal of 1,299.

Moderator Comment: Has POS scanning become a competitive and management necessity for retail operations?

As you could tell when we put Casey’s on our personal
top 10 list of retailers (Wal-Mart
Chief Rates Chain a 6 Out of 10, RetailWire 6/6/02
), we love the way
this convenience store goes about its business.

Ron Lamb, chief executive of Casey’s was not simply putting
on a show of false bravado when he addressed a question about competing with
Wal-Mart in yesterday’s conference call with financial analysts. “We just bought
a competitor that was right next to a Wal-Mart store in Newton, Iowa. We bought
this store, remodeled and found that we could compete with them and actually
make a good return on investment. So we can compete with the Wal-Marts.”

Casey’s has begun the process of putting scanners in
its stores. Watch out when the chain becomes fully automated because it will
only make Casey’s more effective at doing something that it is all ready very
good at – meeting the needs of its consumers. [George
Anderson – Moderator

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