Casey’s General Stores posted first-quarter earnings and revenue that missed analysts’ expectations as same-store sales growth slowed in the company’s grocery and prepared food segments.
The Ankeny-based convenience store chain reported net income of $67.4 million, or $1.70 per share, for the quarter that ended on July 31, compared with $61.8 million, or $1.57 per share, in the same quarter last year. Analysts for Thomson Reuters were expecting net income of $1.81 per share.
Casey’s recorded fiscal year 2017 first-quarter revenue of $1.97 billion, compared with $2.05 billion in the same quarter of fiscal year 2016. Analysts were looking for $20 million of additional revenue.
Casey’s annual goal for fiscal 2017 is to increase same-store sales of grocery and other merchandise by 6.2 percent. For the quarter, same-store sales were up 4.7 percent, compared with an average of 7.5 percent over the last eight quarters.
Terry Handley, Casey’s president and CEO, said in a news release that same-store sales in the grocery and other merchandise segment were lower in part due to slowing sales of cigarettes. Gasoline and diesel sales rose 3.1 percent on a same-store basis in the quarter with an average profit margin of 19.5 cents per gallon.
Same-store sales of prepared foods rose 5.1 percent in the quarter, down from an average of 10.5 percent over the last eight quarters.
“Although many retailers in the food service industry have reported a recent softening in traffic, we continue to see strong sales lifts from stores that recently implemented one or more of our growth programs,” Handley said.
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Casey’s has 39 new stores under construction, including its first location in Ohio. The chain also has 22 replacement stores under construction and has completed three replacement stores in the first quarter.
“Our second distribution center in Terre Haute, Ind., which became operational in February 2016, opens new territory for future expansion,” Handley said. “The state of Ohio will mark the company’s 15th state of operation.”