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What:Shares ofCasey's General Stores fell 12.6% last month, according to data provided byS&P Global Market Intelligence. The gas station and convenience store operator saw its same-store sales decelerate significantly in January -- a worrisome sign that could point to slowing growth in the months ahead.
So what:In June, Casey's management set performance goals for fiscal 2016, including fuel, grocery, and prepared foods same-store sales growth of 2%, 6.2%, and 10.4%, respectively. Through the first two quarters of fiscal 2016, Casey's was largely on track to meet and even exceed those goals. However, the company's comps began to decelerate in the third quarter. And on Feb.16, Casey's reported that its January same-store sales growth figures were all below its full-year targets, with fuel, grocery, and prepared foods comps coming in at only 1.8%, 5%, and 4.7%.
Now what:The trend in prepared foods comps is particularly disappointing, with same-store sales growth declining from 10.3% in the first quarter to 9.4% in Q2 and 6% in the third quarter. Still, Casey's General Stores has several initiatives underway that should help to boost sales in the coming quarters.
Casey's launched its much-awaited online pizza and made-to-order sub sandwich app in early January, and the company is rolling out pizza delivery at up to 100 of its stores this year. Casey's is also converting many of its stores to a 24-hour format -- a process that has boosted prepared food sales at newly converted stores by as much as 30%.
Should these initiatives prove popular with customers, it's possible that Casey's General Stores could see a rebound in comp growth in the year ahead, along with a corresponding recovery in its stock price.
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The article Why Casey's General Stores, Inc. Dropped 12.6% in February originally appeared on Fool.com.
Joe Tenebruso has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Casey's General Stores. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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