Casey's Results Boosted by Federal Tax Cut
Ankeny-based convenience store chain Casey’s General Stores is reporting a big increase in its bottom line results for the third quarter. It had little to do with in-store sales.
The company’s earnings for the quarter climbed to nearly $193 million or $5.08 per share. This is a huge increase from the 58 cents per share from a year ago. And yet, Casey’s CEO Terry Handley says sales of prepared foods fell below expectations, and so it took action in Washington to boost the bottom line.
“The third quarter benefited from a one-time adjustment in our deferred tax liabilities as a result of the tax cuts and jobs act that became effective January 1," he says. "Without this benefit, diluted earnings per share would have been 48 cents.”
Handley says overall in-store sales of grocery products increased by only 2.5 percent.
“Over the course of the quarter, we experienced an increasingly competitive environment, both in pricing and promotions in our market area at a time when we had reductions in our advertising spend,” he says.
Casey’s faced calls from major investors for a review of company operations after disappointing second quarter results and a fall in its stock price.