Casey's Continues Strong Performance

ANKENY, Iowa -- Convenience chain operator Casey's General Stores Inc. saw revenue climb in the second quarter of fiscal 2008, to nearly $1.2 billion dollars, compared to $1 billion in revenue for the comparable quarter, thanks to strong inside sales.

"We had exceptional performance inside our stores from grocery and other merchandise and prepared food and fountain," president and CEO Robert J. Myers said in a statement. "Year to date, gross profit on inside sales rose 17.9 percent to $272.4 million."

Net income for the chain also jumped, reaching $27.6 million from the $17.1 million seen in the second quarter of fiscal 2007.

"We are encouraged by our performance in the first half of the year, especially inside our stores because it demonstrates our management of gross profit and expenses to maximize earnings," said Myers.

For the company's forecourt operations, same-store gas gallons sold were down 1.6 percent for the second quarter, while total gallons sold were up 3.9 percent for the quarter, with an average margin of $0.16, the company stated.

"Throughout the first six months, a favorable market environment kept our average margin unusually high," said Myers. "Same-store gallons were slowed by prices at the pump and measured against difficult comparisons from a year ago; nevertheless, our same-store customer count continued to be positive."

Inside the store, Casey's grocery and other merchandise categories showed same store sales jumping 11.2 percent for the second quarter.

"We are very pleased with the gains we've achieved in this category, especially in light of the higher retail gasoline prices." Myers added: "Growth came from increased sales of higher-margin beverages and the improved match between product mix and customer demand."

The prepared food and fountain segment also showed high growth. Same-store sales were up 10.6 percent for the second quarter of fiscal 2008, with total sales of $154.6 million. "Gross profit increased due to strong fountain sales, strategic price increases, and the continued utilization of point-of-sale information," said Myers.

On the acquisition front, the company's goal is to acquire 50 stores and build 10 new stores by April 30. To date, Casey's has not built any new stores, and has acquired five locations.

"Acquisition activity tends to come in waves," Myers said in a statement. "We are seeing seller expectations higher than what we believe are acceptable purchase values. As always, our focus is on making the right purchase decisions and driving return on invested capital. We currently have written agreements for eight stores, and we remain optimistic about long-term opportunities."

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