Casey's General Stores still focused on turnaround
Casey's General Stores says its turnaround strategy is working despite earnings and comp declines in the fourth quarter.
The C-store operator said net income for the quarter ended April 30 fell to $19.3 million, or 51 cents a share, from $30.1 million, or 76 cents a share, in the same period a year ago. Revenue rose to $2.09 billion from $1.85 billion. Same-store sales for grocery and other merchandise fell 0.4%, while prepared food and fountain same-store sales declined 1.4%.
"A suppressed fuel margin and challenging weather had an adverse impact on fourth quarter results, however we believe we are taking market share in most categories. The 53 new stores we opened in the fourth quarter, combined with increased promotional activity and normalized weather throughout our region has us off to an encouraging start to fiscal 2019," said Terry Handley, President and CEO.
The company says it has completed or made progress on the following turnaround plan activities:
- Hired a Chief Marketing Officer
- Completed the initial $300 million share repurchase authorization
- Increased quarterly dividend 12%, which represents the 18th straight year of increase
- Finalized a contract with a partner for our fleet card program
- Enhancing fuel margin through product optimization
- Identified platforms for fuel and inside price optimization
- Completed startup and design phase of digital transformation
- Streamlined current mobile app and online ordering capabilities
- Generating store level profit improvements from strategic reductions of 24-hour and pizza delivery locations
For the fiscal year, the company built and opened 85 new stores, acquired 26 stores, completed 30 replacements, and remodeled 74 stores. As of April 30, there were 31 new stores, four replacement stores, and three major remodel stores under construction.
"We are excited to have opened our first store in the state of Michigan in April," stated Handley. "We're also encouraged by the number of conversations we're having on potential acquisitions. Currently, we have 11 acquisition stores under agreement to purchase, and are actively pursuing additional acquisition opportunities in a disciplined manner."