Casey’s profit drops despite higher sales

ANKENY - Casey's General Stores posted lower first-quarter earnings as reduced renewable fuels credits and higher operating expenses offset higher sales.

The Ankeny-based convenience store chain reported net income of $52.3 million, or $1.34 a share, down 6.1 percent from $55.7 million, or $1.43 a share, a year earlier. Sales increased 8.3 percent to $2.29 billion for the quarter that ended on July 31 from $2.1 billion in the same quarter last year.

Analysts polled by Thomson Reuters expected per-share profit of $1.25 and revenue of $2.29 billion.

Robert Myers, Casey's chairman and CEO, said a $7.2 million reduction in renewable fuel credit values reduced per-share earnings by almost 12 cents in the quarter.

Fuel sales, which represent the majority of Casey's total revenue, rose in the latest quarter, with total fuel gallons sold increasing by 3 percent on a same-store basis, with an average margin of 19.6 cents a gallon, compared with 22.1 cents a year earlier.

'We continue to experience a lift in gallons sold due to the fuel saver program,” Myers said. 'Despite the reduction in renewal credit values, fuel margins are ahead of our expectations so far this year.”

Casey's annual goal is to build or acquire 72 to 108 stores and replace 25 existing stores. As of the end of the quarter, the company had opened seven new stores and acquired 25 stores.

Brian Johnson, Casey's vice president of finance, said a 4,200-square-foot store under construction at 560 33rd Ave. SW in Cedar Rapids will open this fall. The company will continue to operate its older 3,500-square-foot store at 380 33rd Ave. SW.

Casey's recently began construction of a similar 4,200-square-foot store at 201 Eighth Ave. SE to replace an older 2,916-square-foot location. Johnson said the store, which will open later this year, represents a $2.5 million investment by the company.