Casey’s General Stores saw an increase in inside store sales in the second quarter, which the company’s CEO attributed in part to selling more beer and alternative nicotine products with higher profit margins.

“The biggest driver [in the increase in sales] is in mix,” Darren Rebelez, Casey’s chairman, president and CEO, said during the company’s second-quarter earnings call this week. “We’re seeing a mix shift to some of the higher margin items that we have [in beer and nicotine].”

Casey’s is stocking and selling more import and super premium beers, which have larger profit margins, Rebelez said. The retailer is also selling more nicotine alternative products, such as vapor, which also provide higher profits.

“We’re actually seeing margin rate expansion in tobacco overall even though we’re seeing that decline in combustible cigarettes,” Rebelez said.

For the quarter that ended on Oct. 31, the Ankeny-based convenience store retailer reported a net income of $181 million, up 14% from $158.7 million in the same quarter a year ago. Casey’s diluted earnings per share in the second quarter increased by 14.3% to $4.85 from $4.24 in the same period a year ago.

At its quarterly meeting in December, Casey’s board of directors approved a quarterly dividend of 50 cents per share payable Feb. 17 to shareholders of record on Feb. 3.

Other highlights from Casey’s second-quarter earnings report include:

• Total revenue in the second quarter was $3.94 billion, a 2.9% decrease from the same period a year ago, when total revenue was $4.06 billion.
• $1.46 billion in inside same-store sales, up 9% from $1.34 billion in the same period a year ago.
• Over 775 million gallons of fuel sold, a 6.2% increase from a year ago. Part of the increase is due to the increase in the number of stores operated by Casey’s.

To read the news release about Casey’s second-quarter results, click here.