The cost of rebranding newly-acquired stores, volatile commodities and the battle to fend off a takeover from rival c-store retailer Couche Tard have hit quarterly profits at Casey’s General Stores.
The US company yesterday (7 March) posted a 25.3% fall in third-quarter net earnings to US$12.9m for the three months to the end of January. Over the first nine months of its financial year, net earnings were down 24.4% at $71.9m.
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Casey’s said its third-quarter basic earnings per share were $0.34 – identical to the level reached in last year’s third quarter. When measured over the first nine months of the year, basic earnings per share were $1.64, compared to $1.87 a year earlier.
The retailer said the results included $27.4m in costs from its defence against Couche-Tard’s takeover bid last year. Some $1.7m of those costs were recorded in the third quarter.
Casey’s said its third-quarter earnings were “impacted by compressed margins” from a “competitive” cigarette sector, rising commodity costs and higher expenses from store openings. The retailer acquired 64 stores in the quarter.
“Although rebranding a large number of stores in such a short period of time put a temporary strain on our operations, we are encouraged with our ability to drive same store customer traffic nearly 5%, resulting in double digit sales increases across all lines of our business,” said president and CEO Robert Myers.
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By GlobalDataTotal revenue was up 23.3% in the third quarter to $1.37bn. Over the first nine months of the year, revenue rose 18.2% to $4.09bn.
Click here for the full statement from Casey’s.
