Inside Sales Continue to Drive Casey's FY23 Earnings

ANKENY, Iowa — Despite the headwinds convenience store shoppers are facing, inside sales continue to be a bright spot for Casey's General Stores Inc. in its 2023 fiscal year. 

On Dec. 6, the company reported that inside same-store sales for the second quarter of FY23 increased 7.9 percent compared to the prior year, and 14.4 percent on a two-year stack basis, with an inside margin of 39.8 percent. In addition, total inside gross profit increased 8.9 percent year over year to reach $504.5 million.

Casey's also reported $272 million in EBITDA for the quarter, a 25 percent increase over the prior year.

"Our differentiated business model is resilient in these challenging economic conditions as we have strong execution of our strategic plan across grocery and general merchandise, prepared food and dispensed beverage, and fueled with excellent execution by store operations," President and CEO Darren Rebelez noted during Casey's latest earnings call.

In regards to inside sales, Rebelez said the retailer's team "did a tremendous job with our vendor partners managing the product mix, in-stock levels, and retail price-point adjustments."

Notably, Casey's saw strong performances in pizza slices and whole pies, as well as alcoholic and non-alcoholic beverages. According to the chief executive, the chain was able to "partially offset some inside margin pressure in prepared food and dispensed beverages through select pricing adjustments and finding the right product mix within the grocery and general merchandise category."

By the numbers: 

• Same-store prepared food and dispensed beverage sales were up 10.5 percent year over year, and 15 percent on a two-year stack basis, with an average margin of 56.7 percent compared to 50.6 percent a year ago.
• Same-store grocery and general merchandise sales were up 6.9 percent year over year, and 14.2 percent on a two-year stack basis, with an average margin of 33.3 percent, which is the same as it was a year ago.

"The second quarter showed excellent results in both non-alcoholic and alcoholic beverages as we continue to see great results by leveraging our approximately 1,500 stores with a liquor license and growing our private label sales," Rebelez added.

On the forecourt, same-store gallons sold increased 0.3 percent year over year, with a fuel margin of 40.5 cents per gallon. Casey's diesel business saw low double-digit volume growth.

"We saw cost volatility throughout the quarter and the fuel team navigated through well and continues to appropriately balance profitability and volume as we optimize gross profit dollars," Rebelez reported.

Q2 FY23 Up Close

According to Chief Financial Officer Steve Bramlage, Casey's recorded $4 billion in total revenue for the quarter, an increase of $716 million or 22 percent from the prior year; and $1.3 billion in total inside sales for the quarter, an increase of $129 million or 11 percent from the prior year.

Additionally during the second quarter: 

• Grocery and general merchandise sales increased by $88 million to $917 million, an increase of 10.6 percent;
• Prepared food and dispensed beverage sales rose by $42 million to $351 million, an increase of 13.5 percent; and
• Gross profit was $811 million in the quarter, an increase of $93 million or 13 percent from the prior year.

"The company showed great resiliency throughout the quarter in all three legs of our business, led by store operations [which] performed exceptionally well," Bramlage said.

Ankeny-based Casey's General Stores operates more than 2,400 convenience stores in 16 states. It is the third-largest convenience store retailer and the fifth-largest pizza chain in the United States.