(Radio Iowa) – The Ankeny-based Casey’s convenience store chain reported an increase of 14 percent in net income for the second quarter despite a drop in gas sales. Casey’s Chief financial officer Steve Bramlage talked about the results in a conference call for investors. “Total revenue for the quarter was three-point-nine (3.9) billion dollars, a decrease of 118 million dollars or two-point-nine percent from the prior year. And that’s due primarily to a 14-point-one percent decline in the retail price of fuel,” Bramlage says. He says fuel gallons sold were down just under one percent compared to the second quarter last year. “Retail fuel sales were down 232 million dollars in the quarter, driven primarily by a 51 cent decline in the retail price of fuel from three-dollars and 62 cents per gallon in the prior year to three-dollars and eleven center per gallon in the second quarter,” he says.

(Casey’s photo)

Casey’s C-E-O Darren Rebelez says total inside sales were up nine percent compared to the same quarter last year. He says customers were purchasing more expensive items, including beer. “The fastest growing part of that is imports and super premiums, which tend to come with higher margins. If you go to the other subcategories, liquor and wine, those are both growing at about a ten percent clip, and those have higher margins as well,” Rebelez says. He says cigarettes are another area where they benefit from the sale of products that generate more revenue. “Combustible cigarettes are the lowest margin subcategory within that category, and they’re declining and have been declining for a number of years,” He says. “On the flip side, you have nicotine alternatives and vapor, which are growing at the fastest pace. In fact, nicotine alternatives are almost triple-digit increases, and those tend to come with a much higher margin rate. So we’re actually seeing margin rate expansion in tobacco.”

He says prepared foods and beverages led the way overall for inside sales, up more than five percent. Some of that was due to an increased number of stores. Casey’s closed the acquisition of the Fikes stores and is staying with its projection of an increase of approximately 270 stores for the fiscal year.