Casey's misses earnings target as gasoline margin narrows

Casey's General Stores, with locations throughout Eastern Iowa, posted fourth-quarter earnings that missed expectations as margins on gasoline sales narrowed.

The Ankeny-based convenience store chain recorded net income of $23.1 million, or 61 cents per share, in the quarter that ended April 30, compared with $22.8 million, or 60 cents per share, in the final quarter of fiscal 2011. Casey's posted revenues of $1.8 billion in the most recent quarter, up from $1.5 billion in the same period a year ago.

For the year, Casey's posted net income of $116.7 million, or $3.07 per share, on revenues of $7 billion, compared with $94.6 million, $2.24 per share, on revenues of $5.6 billion in fiscal 2011.

Casey's gasoline margin was down nearly 2 cents per gallon from the fourth quarter a year ago, which reduced basic earnings per share by about 12 cents.

"We were pleased with our ability to offset this decline with strong sales and margin gains inside our stores," said Casey's President and Chief Executive Officer Robert Myers. "Gross profit dollars for the quarter were up nearly 19 percent and we are optimistic about our growth potential in fiscal 2013 with the various operational initiatives we are implementing."

Same-store sales rose 8.5 percent in the fourth quarter from the same period a year ago with an average margin of 33 percent.

"We continued to benefit from major remodels and stores converted to 24-hour operations," Myers said. "These initiatives, along with favorable weather, helped increase same store customer count 7.4 percent and drove total sales for the quarter up 12.7 percent from a year ago."

Casey's annual goal was to increase same-store sales by 5.8 percent, with an average margin of 32.8 percent. Same-store sales finished up 6.7 percent for fiscal 2012, with an average margin of 32.5 percent. Total sales in fiscal 2012 were $1.4 billion, up 14.2 percent from a year ago.

The company's annual goal was to increase the total number of stores between 4 percent and 6 percent. For the fiscal year, Casey's achieved the goal by acquiring 35 stores and completing the construction of 30 new stores, bringing the year-end store count to 1,699.

Casey's also replaced 10 stores during the fiscal year. Myers said the company looks forward to opening its first stores in Kentucky and Tennessee in fiscal 2013.

Casey's stock fell 4.31, or 7.19 percent, to $55.60 in early trading Wednesday on the New York Stock Exchange. The stock plunged in heavy trading, slicing its 50-day moving average to near $54, a level of resistance that Casey's topped in March and again in April.