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Thursday, June 13, 2024

Casey’s sees food sales help them finish with a strong 4th quarter

Casey’s sees food sales help them finish with a strong 4th quarter

The Ankeny-based Casey’s convenience store chain reports decreased revenue but a 12% increase in net income for the fourth quarter compared to last year.

Casey’s President Darren Rebelez says that’s due in part to continued growth in their prepared food sales. He says they’ve been able to keep costs under control by closely tracking supply. “The digital production planner provides the stores with clear data on what quantities of prepared foods need to be made at certain times throughout the day,” he says.

Prepared food sales have increased 14 percent in the last two fiscal years as they have added new items to the menu. Rebelez spoke during a conference call for investors and says they have avoided the large inflationary cost increases that restaurants have been having trouble with. “A  lot of those franchisees don’t have places to turn to, or other levers to pull to absorb a lot of the operating cost inflation that they’ve experienced over the last couple of years and that’s why you’re seeing menu prices expand as high as they have,” he says.

Rebelez says he doesn’t see the higher menu prices for their restaurant competitors dropping anytime soon, which helps Casey’s food sales. “Franchisees have to decide that they can absorb the inflation and really take a haircut in their profitability to be able to drop their restaurant prices,” he says. “I’d really don’t anticipate that happening. I think you’ll see what you’re starting to see now with some spurts of promotional activity for a month at a time, which is I think what some of these guys have been doing, but I don’t know that that’s very sustainable over the long term given their the franchise dynamic.”

Rebelez says they continue to add more stores to their mix. “During the fiscal year we built 42 new stores and acquired another 112 for a total of 154 new and acquired stores,” Rebelez says. “We are ahead of our pace for adding at least 350 stores by the end of fiscal 2026.”

Casey’s now has 2,658 stores in 17 states, including the addition of stores purchased in Texas.

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