Forecourt Initiatives Have Casey's Bullish on the Fuels Category
ANKENY, Iowa — During the fourth quarter of its 2020 fiscal year, Casey's General Stores Inc. saw its fuel dollars rise, but demand dip as two forces converged in mid-March.
"During the quarter in the fuel category, we experienced an unprecedented environment in both fuel demand and margin," President and CEO Darren Rebelez reported during the convenience store retailer's Q4 earnings call.
As state and local restrictions implemented around the coronavirus pandemic drove down demand, same-store gallons in the quarter declined by 14.7 percent. Casey's saw the greatest impact in April, but same-store gallons began to stabilize during the middle of the month and "have steadily moving upward," Rebelez noted.
At the same time as the COVID-19 pandemic began to affect the business, the macro environment for fuel supply was also disrupted and created a significant fuel margin benefit throughout the industry, according to the chief executive.
Casey's recorded an average fuel margin of 40.8 cents per gallon for the quarter. Fuel margins peaked around April 1 and moderated during the month.
The average retail price during the time period was $2.05 per gallon vs. $2.46 a gallon a year ago. Total gallons sold for the quarter were down 10.7 percent to 488 million gallons, while gross profit dollars increased 96 percent due to the margin environment.
For the full fiscal year, same-store gallons were down 5.1 percent, but gross profit dollars in the fuel category increased 32 percent compared to the previous fiscal year.
During the fourth quarter, Casey's completed the conversion of its stores to digital price signage. "This sign conversion is the final step in our plan that will allow us increased flexibility in adjusting retail prices to react more quickly to the changing fuel environment," Rebelez explained.
The company also made progress around its fuel procurement initiative. Casey's finished the fiscal year with roughly 50 percent of its total fuel under contract.
In addition, the retailer continued to add new fleet cardholders over the course of the fourth quarter. To date, it has more than 8,100 accounts and 20,000 cardholders.
"We remain optimistic about the potential of all these initiatives going forward," said Rebelez.
Ankeny-based Casey's operates 2,146 convenience stores.