Casey's prepared foods perform well in Q2 despite challenges
Iowa-based Casey’s General Store, a leading convenience chain, released its Q2 2022 financial results on Tuesday, citing an increase in same-store sales, gross profit and fueling. The chain’s popular and recently upgraded private label and prepared food selectionperformed well in Q2, despite availability challenges.
“Our private label initiatives contributed favorably to the gross profit margin in this quarter,” said Darren Rebelez, president and CEO of Casey’s. “Same-store prepared food and dispensed beverages were up 4.1%. Pizza slices continued to perform exceptionally well, up 21% in the quarter. We most felt product availability challenges in the prepared foods category in the quarter. Many times during the quarter, we were out of key items such as donuts, fountain beverage cups and chicken.”
Casey’s reported that inside same-store sales were driven by strong performance including from private brands in packaged beverages, grocery items such as salty snacks and meat snacks, as well as continued momentum in pizza slices, driven in part by improved guest traffic. Grocery and general merchandise same-stores sales were up 14% on a two-year stacked basis, due in part to the effective store resets completed last year. Same-store gallons sold were positively impacted by higher guest traffic. Casey’s total fuel gross profit was up 13.6% versus Q2 2021, and total inside gross profit increased 12.3% to $463.4 million compared to the same period last year.
“Inside sales and fuel gallons sold were up in the second quarter as guest traffic continues to improve,” said Rebelez. “I am very proud of how the Casey’s team responded during a difficult retail environment this quarter. Inside gross profit was up sharply despite product availability pressures, especially in our prepared food and dispensed beverage business, and an inflationary supply chain environment. Our fuel team achieved strong margins in a challenging rising cost market while also growing fuel gallons sold. We are making excellent progress integrating the Buchanan Energy and Circle K acquisitions and look forward to doing the same with the pending Pilot acquisition.”
Due to the recently announced 40-store acquisition of Pilot convenience stores, Casey’s now expects to add approximately 225 units during fiscal 2022, up from the previously disclosed 200 units. This pending transaction is expected to be approved in Q3 of fiscal year 2022.