Casey's Reports Strong Quarter

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Casey's Reports Strong Quarter

ANKENY, Iowa -- Casey's General Stores Inc., operator of 1,334 convenience stores, reported a strong second quarter with a 7.5-percent spike in in-store merchandise sales. Sales for the quarter were $354 million with an average margin of 32 percent and a gross profit of $113.1 million.

Casey's President and CEO Ronald Lamb, who said the company's goal this year was to implement technology initiatives to improve gross profit, reported a 9-percent increase in overall gross profit for the second quarter and an 8-percent increase for the year to date. The second-quarter gross profit was $109.7 million and $216.3 million for the year.

"We are proceeding as planned toward our goal of improving gasoline gross profit by balancing growth in gallons sold and average margin per gallon," Lamb said. Though gallons sold in the first six months of fiscal 2003 were down slightly to 475.1 million from 479.1 million for the first half of fiscal 2002, the average margin per gallon increased to 10.6 cents from 10.4 cents and the gasoline gross profit grew to $50.2 million from $49.7 million.

Prepared food and fountain sales were also up, jumping 8 percent to $87.9 million with an average margin of 59.6 percent vs. 54.4 percent last year. Gross profit was up a solid 18.4 percent, to $52.4 million. The improvements were attributed to new product offerings and enhanced operational efficiencies.

The Casey's Board of Directors also said it accepted the decision of Casey's co-founder Donald Lamberti to step down from active management of the chain and from his positions of chairman of the board and chairman of the executive committee effective April 30, 2003. Lamberti plans to continue as a director. Lamberti was elected to the Convenience Store Industry Hall of Fame in 2000.

"Casey's financial condition is now the strongest in its history. I'm confident that under Ron's leadership, the company's experienced management team will continue to serve our customers, our employees and our shareholders exceptionally well," Lamberti said.

"Although we will miss Don's day-to-day involvement, his continued presence on the board will allow us ongoing access to his insight and experience," Lamb said.

Moving Forward
For the remainder of the year, Casey's has a two-part annual goal for inside sales: to improve the gross margin to 36.4 percent and to increase same-store inside sales as much as 6 percent. Total inside sales for the first half of fiscal year 2003 are up 7.6 percent to $441.8 million. "Scanning cigarettes is giving us more control over retail pricing and greater inventory efficiency in our largest merchandise category," Lamb said.

The company plans to be scanning tobacco products in every store that has pay-at-the-pump by the end of the year. Casey's currently has 745 stores that feature both pay-at-the-pump and scanning. It expects to have pay-at-the-pump at virtually all sites by next May.