Pizza Helps Casey's Cook Up Solid Second Quarter

ANKENY, Iowa -- Casey's General Stores Inc. has found the "right recipe" and will offer flatbread pizza at all of its convenience stores beginning in January, Chief Financial Officer Bill Walljasper said during the company's 2014 fiscal second-quarter earnings call today.

As CSNews Online previously reported, the retailer began offering the flatbread pizza this week at its initial Casey's Pizza Express location.

"If you're in our area, we hope you will be able to try it out. It should be a really great offering," Walljasper remarked during the call.

He also discussed expansion of the Casey's Pizza Express test program. The company will soon add five more of these pizza pickup locations in Des Moines, Iowa. "We're excited about the opportunity," he said. "Pizza Express is in areas underserved by our pizza delivery service."

Casey's is equally excited about expanding its pizza delivery. The retailer added this service to 94 c-stores thus far this year, and plans to add it to 50 more stores by the end of its 2014 fiscal year. Approximately 325 stores now offer pizza delivery.

Pizza delivery was one of the top reasons Casey's reported strong results for its fiscal second quarter, which ended Oct. 31. The retailer earned $41 million in its latest quarter, a nearly $9 million year-over-year improvement. Prepared food and fountain sales led the way. This category saw sales increase by 12 percent year over year with margins averaging 61.8 percent.

Grocery and other merchandise sales had a banner quarter as well, with same-store sales up 10.2 percent. "The company experienced strong lifts in beer and beverage sales, and we believe we have gained significant market share with our retail price adjustments made last fiscal year," said Chairman and CEO Robert J. Myers.

Also strong were fuel sales. Same-store gallons sold increased 4.2 percent year over year. Average fuel margins reached 16.7 cents per gallon. "The margins are excellent," said Walljasper. "The Fuel Saver Program we have with Hy-Vee is a major thing that helped."

On the new build and acquisition front, Casey's built 14 new stores and acquired 22 locations thus far in its 2014 fiscal year. In addition, 34 new stores and 14 replacement stores are currently under construction.

According to Walljasper, Casey's will continue to look for acquisitions and would expand upon its current 14-state operating region if the right opportunity presented itself. In fact, he noted that the acquisition pipeline now may be the best he has seen in his 24 years at the Ankeny, Iowa-based company.

"We generally tend to look for smaller chains and mom-and-pop acquisitions," he explained. "But with that said, we certainly won't shy away from larger acquisitions if presented."

Casey's General Stores Inc. operates more than 1,750 convenience stores and gas stations.