The sudden drop in vehicle usage caused by the novel coronavirus outbreak and subsequent shelter-in-place orders in parts of the U.S. meant less demand for gasoline, a nationwide trend to which Ankeny-based Casey’s General Stores Inc. was not immune, according to the company’s quarterly and annual earnings report.

During the fourth quarter that ended on April 30, the convenience store chain sold 487.7 million gallons of gasoline, a 10.7% decline from the same period a year ago, according to the report released late Monday by the publicly traded retailer.

However, total gross profit in fuel sales increased 96% to $198.8 million in the fourth quarter, compared with $101.4 million during the same period a year ago, the report shows.

The increased profit in fuel sales was spurred by the oil-price war between Saudi Arabia and Russia, which pushed oil prices down to levels not seen in more than two decades. In addition, because travel for work, social and recreational reasons was abruptly halted by COVID-19 related restrictions, fuel use declined, causing oil prices to fall.

National experts are estimating demand for gasoline will be 50% less this year than in 2019.
Casey’s officials expect the company’s more than 2,200 stores in 16 states to continue to outperform national fuel sale trends. Officials have been following mobility trends and are seeing an increase in residents’ movement in the 16 states the company serves, said Chris Jones, Casey’s senior vice president and chief marketing officer.  

“Over the past few weeks, we've seen an improvement in consumer mobility across our 16-state footprint related to gradual returns to work and related to people reconvening some of their normal habits,” he said. “It’s anybody’s guess as to when things will be fully back to normal. And that certainly varies across our states’ footprints.”

Overall, diluted earning per share for the fiscal year that ended April 30 were $7.10, up from $5.51 per share in fiscal 2019, the company reported.

Casey’s reported total revenue of $9.1 billion for the fiscal year that ended April 30, down from fiscal 2019's overall revenue of $9.3 billion.

Contributing to the decline in revenue was the COVID-19-related impact on the prepared food and fountain drinks portion of Casey’s business. In the fourth quarter, total revenue in prepared foods and fountain drinks was $229.9 million, down 9.5% from the same quarter a year ago, according to the earnings report.

In mid-March, Casey’s closed its self-service food and fountain drink stations in all of its stores in an effort to help slow the spread of the virus, Darren Rebelez, Casey’s president and CEO, said during an earnings call today with investors. In addition, several states ordered convenience stores and other retail outlets to close.

As restrictions have eased, “we’ve seen a gradual improvement in self-service items,” Rebelez said.

During the fiscal year that ended April 30, Casey’s opened 60 newly constructed stores and acquired 18 others, pushing to 2,207 the total number of stores operated by the company. Four of the newly built stores were in Iowa.

Rebelez said that in the coming fiscal year, the company will focus on “liquidity and maintaining a strong balance sheet.”

“With that in mind, we'll continue to be prudent in our capital spending in order to maintain flexibility until we have more certainty around what the new normal may look like,” he said.

Casey’s officials, because of the economic uncertainty caused by the pandemic, declined to say how many new stores the company plans to open in the coming year.

However, Jones said the company “will continue in the upcoming year to build new stores … and continue to look for opportunities to acquire existing convenience stores operated by smaller companies."

“A business like Casey’s looks at the current climate as a potential opportunity to accelerate acquisitions,” Jones said. “We’re always in conversations with independent operators in our footprint about when it might be the right time to consider being acquired by Casey’s.”

To read the news release on Casey’s fourth-quarter and annual earnings, click here.