Casey's Sees Q4 Growth, Eyes Private Label Expansion
Convenience store chain Casey's had a solid fourth quarter with gains from inside sales and fuel sales driving growth. The company is also focused on expanding its private label assortment and implementing a tiered approach with its selection of own brand products.
For the quarter ended April 30, inside sales were $1.4 billion, up from $1.3 billion in the comparable quarter of the prior fiscal year. Total inside same-store sales grew 1.7%, with grocery and general merchandise same-store sales up 1.8%. Fuel sales in the quarter were $819 million, up $162 million due to a 17.8% increase in total gallons sold.
Total revenue in the fourth quarter was $3.9 billion, up from total revenue of $3.6 billion in the prior year’s fourth quarter. Net income was $98.3 million, an increase over net income of $87 million in the fourth quarter of the previous fiscal year.
“Casey's delivered another record fiscal year as our team continued to execute on our three-year strategic plan, reaching $546.5 million of net income and $1.2 billion in EBITDA," said Darren Rebelez, president and CEO of Casey’s. “Inside same-store sales outperformed the industry, up 2.6%, or 7.1% on a two-year stack basis, led by strong performance in hot sandwiches and bakery, as well as alcoholic and non-alcoholic beverages.”
For the full fiscal year, Casey’s reported revenue of $15.9 billion, up from revenue of $14.9 billion in the prior fiscal year.
With the retailer’s inside sales growing, the company continues working to boost its private label assortment. During its investor conference call to discuss fourth-quarter results, Rebelez said Casey’s has “a lot of work going on” with its private label products currently.
“When we launched our private label several years ago, we really targeted national brand equivalents, and it was really somewhat of a one-size-fits-all,” he said. “And we had some really good success with that. We’re evolving that assortment and that approach to more of a tiered approach, where we’ll have a premium tier, with higher-quality ingredients and more differentiated products.”
Rebelez said the middle tier of Casey’s private label assortment will be products on par with national brands, and its value-oriented tier would be more commoditized.
“We’re in the process of refreshing the assortment across all of those tiers,” he said. “We think that gives us some good opportunity to drive incremental business and drive some margin at the same time.”
