10-KPeriod: FY2002

CASEYS GENERAL STORES INC Annual Report, Year Ended Apr 30, 2002

Filed July 26, 2002For Securities:CASY

Summary

Casey's General Stores, Inc. operates a chain of convenience stores primarily in nine Midwestern states, with a significant focus on small towns (63% of stores in populations under 5,000). As of April 30, 2002, the company operated 1,258 company-owned stores and 76 franchised stores, totaling 1,334 locations. The business model emphasizes a broad selection of products, including freshly prepared foods like pizza and donuts, alongside traditional convenience items and gasoline. A key strategic initiative highlighted is the company's intent to increase the number and proportion of company-owned stores over franchised stores, driven by their greater profitability and the company's desire for increased operational control. Expansion efforts are concentrated in existing markets, with plans to open approximately 15 new company stores in fiscal year 2003.

Key Highlights

  • 1Operates 1,334 convenience stores across nine Midwestern states, with a strategic focus on small-town markets.
  • 2Company-owned stores (1,258) significantly outnumber franchised stores (76), a trend the company intends to continue increasing due to higher profitability and control.
  • 3Diversified product offering includes traditional convenience items, tobacco, health and beauty aids, automotive products, gasoline, and a growing emphasis on high-margin, freshly prepared foods like pizza and donuts.
  • 4Gasoline sales constitute a significant portion of revenue (58% of net sales in FY2002), but profit margins are considerably lower (7.5%) compared to non-gasoline items.
  • 5Strategic focus on converting franchised stores to company-owned stores (21 converted in FY2002) and aggressive site selection for new company store construction.
  • 6The company actively manages its product mix to prioritize higher-margin prepared foods, which generated approximately 75% of gross profits from retail sales despite being only 38% of retail sales.
  • 7Actively seeking to acquire remaining franchised stores, with outreach to 30 franchisees operating 56 stores, indicating a strong push towards full ownership.

Frequently Asked Questions

Casey's General Stores operates convenience stores primarily in nine Midwestern states, with a particular focus on small towns (populations under 5,000), offering a broad selection of food, beverages, tobacco, and general merchandise, along with self-service gasoline. The main states of operation are Iowa, Missouri, and Illinois.

Casey's is actively working to increase the number of company-owned stores and their proportion relative to franchised stores. This strategy is driven by the higher profitability of company-owned stores and the desire for greater operational control. In fiscal year 2002, 21 franchised stores were converted to company-owned stores, and the company is making offers to acquire more franchised locations.

Prepared food items, such as pizza and donuts made on-site, are a key growth area and a significant contributor to profitability. While comprising about 38% of retail sales, these high-margin items generated approximately 75% of the company's gross profits from retail sales in the last three fiscal years, with gross profit margins averaging around 56%.

Gasoline sales represent a substantial portion of Casey's revenue (58% in FY2002) but have much lower profit margins (around 7.5-8.2% gross profit). The company is exposed to volatile wholesale gasoline prices, intense price competition, and potential supply disruptions. Any significant decrease in gasoline profit margins or sales volume could materially impact the company's overall earnings.