Casey’s Ends Robert Myers Era With a Flourish
ANKENY, Iowa — Stronger sales in the prepared food and fountain, grocery and other merchandise, and fuel categories all contributed to a strong 2016 fiscal fourth quarter for Casey’s General Stores Inc., which marked the last quarter in the Robert W. Myers era as CEO of the convenience store chain.
Myers retired as chief executive after 10 years at the helm on April 30 (he remains chairman), which is also the date when Casey's 2016 fiscal fourth quarter and 2016 fiscal year ended.
During the fourth quarter, net income rose nearly $6 million year over year to $47.04 million. For the fiscal year, Casey’s reported a net profit of $226 million vs. $180.6 million in its 2015 fiscal year.
Terry Handley, who took over as Casey's president and CEO on May 1, remarked in a news release that fiscal 2016 was an “exciting year for Casey’s."
"We successfully opened our second distribution center in Terre Haute, Ind., and launched our mobile app in conjunction with rolling out online ordering across all our stores,” Handley said. “Total gross profit was up over 12 percent for the year, and the company is positioned well for continued strong performance in fiscal 2017.”
Zeroing in on its most recent quarter, prepared food and fountain sales rose the most in-store on a percentage basis, increasing 8.2 percent year over year, with an average margin of 61.9 percent. Handley noted that Ankeny-based Casey’s is optimistic about this category moving forward. In addition to online ordering, the c-store retailer “locked in favorable cheese costs through December 2016 and continues to roll out major remodels, 24-hour conversions and pizza delivery.”
Sales in the grocery and other merchandise segment improved by 7.4 percent year over year, with an average margin of 32.1 percent. “For the year, electronic cigarette sales continued to lead the category as consumers traded up premium brands in response to lower retail fuel prices,” reported Handley.
Fuel sales also had a strong quarter, with same-store gallons climbing 4.6 percent with an average margin of 17.8 cents per gallon.
However, on the other side of the ledger, operating expenses suffered a 12.9-percent increase during the fourth quarter compared to the same period in fiscal 2015. Handley explained this rise was due to Casey's operating more stores compared to the same period in the prior year, along with various growth programs impacting existing stores.
During fiscal 2016, Casey’s completed 51 new store constructions and acquired five c-stores. It also completed 11 replacement stores and 102 major remodels.
“We have dedicated more resources to our store development area over the past year,” Handley said. “As a result, we currently have a robust pipeline of projects, with 21 stores under construction and an additional 75 sites under contract for future new store construction, including numerous sites in Ohio.”