Casey's Turns in Solid Q3 2024 Boosted by Inside Sales
ANKENY, Iowa — Casey's General Stores Inc. put another solid quarter in the books — a testament to what its chief executive calls the resilience of its business model.
"Our team members across the organization continue to execute our strategic plan extremely well and the results are proving that the hard work is paying off," said Darren Rebelez, board chair, president and CEO of the Ankeny-based convenience store retailer.
Speaking during a call detailing the results of the third quarter of the company's 2024 fiscal year on March 12, Rebelez pointed to the rollout of new in-store programs, as well as the implementation of new tools that enable Casey's stores to run more efficiently, including a new digital production planner.
[Read more: Casey's Adds New Sandwich Lineup to Menu]
"Our strength in the industry is evidenced by our robust inside same-store sales, both in the quarter and on a two-year stack basis. This allows for strong guest support for food innovation and in January, we rolled out a refreshed chicken sandwich and cheeseburger that guests are already gravitating toward — just another example of guests trusting that Casey's will deliver," he said. "Our prepared food program continues to drive strong results and gives us a unique competitive advantage in the industry."
2,600-Plus Stores & Growing
Casey's General Stores Inc. made several expansion moves in the second half of calendar year 2023. They included:
- Casey's picked up 11 EZ GO convenience stores from Love's Travel Stops, adding to its store count in Nebraska and Oklahoma in late 2023.
- The convenience retailer entered Texas with the acquisition of 22 Lone Star Food Store locations from W. Douglass Distributing Ltd.
- This past summer, Casey's reached a deal to acquire 63 Minit Mart and Certified Oil convenience stores from EG America.
- In addition to its prepared food program, Casey's is seeing strong growth in its private label assortment with positive growth in units and gross profit vs. the prior year.
The retailer's hard work is paying off in loyal customers, too. The Casey's Rewards program now has more than 7.7 million members. Its "24 Days of Casey's Rewards" initiative during the holiday season helped drive the program's growth.
[Read more: Casey's Lays Out Strategic Plan for Next Three Years]
Operational excellence is also contributing to Casey's strong performance.
"With help from the continuous improvement team, our store operations team continues to operate the stores more effectively and efficiently with their efforts. We had another quarter reducing same-store labor, marking the seventh consecutive quarter of same-store labor hour reduction while increasing bulk guest satisfaction in team member engagement scores," Rebelez reported. "There's more to come as we're excited about what's in the pipeline for the next 12 to 18 months. Regarding store simplification, we look forward to giving our team members even more tools to make a great guest experience."
Q3 FY24 by the Numbers
For the third quarter of its 2024 fiscal year, Casey's reported net income of $87 million, down 13%, and EBITDA of $218 million, down 2%, from the same period a year ago.
Inside same-store sales increased 4.1% compared to the prior year and 9.9% on a two-year stack basis, with an inside margin of 41.3%. Total inside gross profit increased 11.3% compared to the prior year to $501.5 million.
Same-store fuel gallons were down 0.4% compared to the prior year with a fuel margin of 37.3 cents per gallon. Total fuel gross profit decreased 2% to $257.2 million.
"Our results were solid, especially inside the store where we continue to grow sales and expand margin. This was accomplished during a quarter of heavy integration of acquired stores across our footprint," said Chief Financial Officer Steve Bramlage. "Overall, this was another quarter of effective operational execution and what is shaping up to be a great fiscal 2024."
According to Bramlage, total revenue for the quarter was $3.3 billion, a decrease of $3 million or 0.1% from the prior year due primarily to the lower retail price of fuel. Total inside sales for the quarter were $1.2 billion, an increase of $106 million or 9.5% from the prior year.
Looking closer at in-store categories, prepared food and dispensed beverage sales rose by $36 million to $349 million, an increase of 11.4%. Grocery and general merchandise sales increased by $70 million to $866 million, an increase of 8.8%.
Results were also favorably impacted by Casey's operating approximately 7% more stores on a year-over-year basis, Bramlage added.
On the forecourt, retail fuel sales were down $106 million in the third quarter as an 11% decline in the average retail price of fuel was partially offset by a 6.9% increase in fuel gallons sold. The average retail price of fuel during the period was $2.98 a gallon, compared to $3.34 a gallon a year ago.
Total operating expenses were up 10.3%, or $53.2 million, in the third quarter with approximately 3% of the increase due to lapping a one-time benefit last year from the resolution of a $15 million legal matter. Additionally, roughly 6% of the total operating expense increase was due to unit growth and integration spending because Casey's operated 167 more stores than the prior year, Bramlage noted.
"As we approach the end of fiscal 2024, I'm proud of how we started our three-year strategic plan. I'm extremely excited about the outlook of the business now that the world and our industry has evolved to a more normalized post-pandemic environment," Rebelez said. "Our unique business model is proving to be both highly differentiated and resilient. We have abundant growth opportunities on the horizon and the team and balance sheet to capitalize on. This gives me great confidence in our team and our ability to execute the strategic plan."
Casey's General Stores operates more than 2,600 stores across 17 states.
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