Casey's General Stores, Inc. (NASDAQ:CASY) Q1 2020 Earnings Conference Call - Final Transcript
Sep 10, 2019 • 10:30 am ET
up for continued strong performance in fiscal 2020.
I would now like to go over our results and some of the details in each of the categories. During the first quarter, in the fuel category, we experienced a favorable fuel margin environment combined with our ability to leverage the implementation of price advantage, which is our fuel price optimization tool. These factors enable us to achieve an average fuel margin of $0.244 per gallon, up nearly 400 basis points from the same period last year. This drove over a 22% increase in gross profit dollars from the fuel category.
Same-store gallons were down 2% in the quarter, in line with our expectations for the quarter, but lower than our annual guidance range. This is primarily due to our optimization efforts and softer demand, as vehicle miles traveled in the Midwest declined. The average retail price for fuel during this period was $2.63 a gallon, compared to $2.74 a year ago. Despite the decline in same-store gallons, total gallons sold for the quarter were up nearly 3% to 619 million gallons, due to the strong contribution from new stores opened in the last 12 months. Same-store gallons in August were below our annual guidance. The average fuel margin in August is trending ahead of our annual guidance range.
Moving to inside the store, total sales in the grocery and other merchandise category were up 6.7% to $688 million in the first quarter. Same-store sales were up 3.2% during the quarter, in line with our annual guidance. Excluding cigarettes, same-store sales were up 6.2%. The average margin in the quarter was 31.3% down from a year ago, primarily due to an out-of-period inventory adjustment related to how we account for inventory in-transit, which had a $6.6 million adverse impact. This impacted the margin by about 100 basis points, and gross profit dollars for the quarter in the category was 3.1% to $215.5 million. Without the previously mentioned adjustment, gross profit dollars would have been approximately 6.3% and same-store sales in August are trending within our annual guidance.
In the prepared food and fountain category, total sales were up 5.3% to $296 million for the quarter. Same-store sales were up 1.6%. We anticipate acceleration in same-store sales in the upcoming quarters, as we gain traction from the launch of our new e-commerce platform and mobile app, as well as the upcoming launch of our loyalty program later this fiscal year. The average margin for the quarter was up 20 basis points to 62.2% versus the first quarter year ago, primarily due to a product mix shift in cycling over 50th anniversary promotions from a year ago.
In the quarter, prepared food gross profit dollars rose 5.6% to $184 million. The average cost of cheese for the first quarter was $1.96 and is trending up. We're currently buying on the spot market and monitor this closely, looking for buying opportunities. Same-store sales in August are trending below our annual guidance, but have been trending