Prepared Food segment fell
The Prepared Food and Fountain segment accounted for 12% of Casey’s General Stores’ (CASY) 2Q18 sales. It recorded a 5.5% YoY increase during the quarter. The segment’s total sales stood at $262 million.
Sales comps grew 2.1% during the quarter and fell short of the annual goal of 4%–6% growth.
“Softer traffic in the back half of the quarter affected overall results in the category,” said Terry Handley, Casey’s president and CEO.
The Prepared Food segment was Casey’s fastest-growing segment. It recorded average comps growth of ~11% between fiscal 2014 and 2016. The company missed the annual goal for six consecutive quarters. It also revised the target downwards several times. With the 2Q18 results, management lowered the sales comps target. It expects to increase comps in the 2%–4% range for fiscal 2018.
Margins met the annual target
The Prepared Food and Fountain segment’s average margin for the quarter stood at 61.3%. The company fell short of the annual goal range of 61.5%–62.5%. The margin was 160 basis points lower compared to the margin in 2Q17, primarily due to higher input costs.
The segment’s gross profit dollars rose 2.7% to $160.5 million during the quarter.
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