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In spite of a tough operating environment, Casey's General Stores, Inc. (CASY - Free Report) concluded fiscal 2022 on a strong note. Markedly, both the top and the bottom lines not only beat the Zacks Consensus Estimate but also increased year over year in the fourth quarter.
A Closer Look at Results
Casey's, one of the leading convenience store chains in the United States, posted quarterly earnings of $1.60 per share that beat the Zacks Consensus Estimate of $1.54 and improved sharply from $1.12 in the prior-year period. This year-over-year jump in the bottom line was owing to higher profitability both inside the store and in fuel, partly offset by an increase in operating expenses. The bottom line was favorably impacted by a lower tax rate but hurt by increased interest expenses and higher depreciation expenses.
Total revenues of $3,458.9 million surged 45.4% year over year and beat the Zacks Consensus Estimate of $3,439 million. Revenues grew across all three categories: Fuel, Grocery & General Merchandise, and Prepared Food & Dispensed Beverage.
Inside sales jumped 13.6% to $1,037.3 million during the quarter under review. Inside same-store sales increased 5.2% compared with a 12.8% rise registered in the year-ago period. The metric improved on account of solid sales in pizza slices and breakfast sandwiches, and alcoholic and non-alcoholic beverages.
Casey's General Stores, Inc. Price, Consensus and EPS Surprise
Gross profit increased 17.1% year over year to $656.7 million, courtesy of higher revenues. However, gross margin contracted 460 basis points to 19%. Inside gross profit grew 12.1% to $409 million. Meanwhile, Inside margin shrunk 50 basis points to 39.4% due to inflationary pressures in the prepared food and dispensed beverage category. This was partly offset by pricing actions and an increase in single-serve and smaller package-sized non-alcoholic and alcoholic beverages in the grocery and general merchandise category.
Adjusted EBITDA increased 17.8% year over year to $165.5 million during the quarter under discussion.
Casey's witnessed an increase of 15.2% in operating expenses of $490.9 million. The metric increased on account of operating 209 more stores compared with the same period last year, a jump in same-store employee expenses, and a rise in same-store credit card fees due to higher retail fuel prices.
Performance by Categories
We note that Fuel sales surged 62.2% year over year to $2,344.6 million during the quarter. Fuel gallons sold jumped 16% to 621.1 million. Fuel gallons same-store sales rose 1.5% during the quarter under discussion compared with a 6.4% jump in the year-ago period. Fuel gross profit rose 27.2% to $224.6 million due to an increase in fuel margin. We note that fuel margin increased to 36.2 cents per gallon from 33 cents per gallon in the prior-year period.
Grocery & General Merchandise sales rose 14.5% to $744 million during the quarter. Same-store sales increased 4.3% compared with 12.5% growth in the year-ago quarter. Grocery & General Merchandise margin expanded 70 basis points to 32.5%. Again, gross profit increased 17.2% to $242.1 million during the quarter.
Prepared Food & Dispensed Beverage sales rose 11.3% to $293.3 million. Same-store sales increased 7.6% compared with 13.4% in the year-ago quarter. Prepared Food & Dispensed Beverage margin contracted 320 basis points to 56.9%. We note that gross profit jumped 5.4% year over year to $167 million.
Store Update
During fiscal 2022, Casey's constructed 21 new stores, acquired 207 stores and closed 20. As of Apr 30, 2022, it operated 2,452 stores. The company expects to add approximately 80 stores in fiscal 2023.
Other Financial Aspects
Casey's ended the quarter with cash and cash equivalents of $158.9 million, long-term debt and finance lease obligations (net of current maturities) of $1,663.4 million and shareholders’ equity of $2,240.8 million.
During the quarter, Casey's did not make any share repurchases. The company has $400 million remaining under its existing share repurchase authorization.
The company’s board of directors raised the quarterly dividend for the 23rd straight year by 9% to 38 cents a share. The dividend is payable on Aug 15, 2022, to shareholders of record on Aug 1, 2022.
FY23 Outlook
Casey's envisions fiscal 2023 same-store inside sales to increase 4-6% and expects to maintain an inside margin of about 40%. Management anticipates same-store fuel gallons to be flat to up 2%. It guided an increase of approximately 9-10% in total operating expenses. The company expects to make an investment of roughly $450-$500 million in property and equipment in the fiscal year.
Shares of this Zacks Rank #3 (Hold) company have advanced 11.4% in the past three months compared with the industry’s growth of 9.5%.
3 Picks You Can’t Miss Out On
We have highlighted three better-ranked stocks, namely Kroger (KR - Free Report) , Tractor Supply Company (TSCO - Free Report) and Sysco Corporation (SYY - Free Report) .
The Zacks Consensus Estimate for Kroger’s current financial-year sales and EPS suggests growth of 3.7% and 4.4%, respectively, from the year-ago reported numbers. KR has a trailing four-quarter earnings surprise of 22.1%, on average.
Tractor Supply Company, a rural lifestyle retailer in the United States, carries a Zacks Rank #2. The company has an expected EPS growth rate of 9.8% for three-five years.
The Zacks Consensus Estimate for Tractor Supply Company’s current financial year sales and EPS suggests growth of 8.8% and 10.6%, respectively, from the year-ago period. TSCO has a trailing four-quarter earnings surprise of 12.4%, on average.
Sysco Corporation, the leading global foodservice distribution company, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 9.1%, on average.
The Zacks Consensus Estimate for Sysco Corporation’s current financial year sales and EPS suggests growth of 32.6% and 124.3%, respectively, from the year-ago period. Sysco has an expected EPS growth rate of 11% for three-five years.
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Casey's (CASY) Q4 Earnings Surpass Estimates, Rise Y/Y
In spite of a tough operating environment, Casey's General Stores, Inc. (CASY - Free Report) concluded fiscal 2022 on a strong note. Markedly, both the top and the bottom lines not only beat the Zacks Consensus Estimate but also increased year over year in the fourth quarter.
A Closer Look at Results
Casey's, one of the leading convenience store chains in the United States, posted quarterly earnings of $1.60 per share that beat the Zacks Consensus Estimate of $1.54 and improved sharply from $1.12 in the prior-year period. This year-over-year jump in the bottom line was owing to higher profitability both inside the store and in fuel, partly offset by an increase in operating expenses. The bottom line was favorably impacted by a lower tax rate but hurt by increased interest expenses and higher depreciation expenses.
Total revenues of $3,458.9 million surged 45.4% year over year and beat the Zacks Consensus Estimate of $3,439 million. Revenues grew across all three categories: Fuel, Grocery & General Merchandise, and Prepared Food & Dispensed Beverage.
Inside sales jumped 13.6% to $1,037.3 million during the quarter under review. Inside same-store sales increased 5.2% compared with a 12.8% rise registered in the year-ago period. The metric improved on account of solid sales in pizza slices and breakfast sandwiches, and alcoholic and non-alcoholic beverages.
Casey's General Stores, Inc. Price, Consensus and EPS Surprise
Casey's General Stores, Inc. price-consensus-eps-surprise-chart | Casey's General Stores, Inc. Quote
Margins & Expenses
Gross profit increased 17.1% year over year to $656.7 million, courtesy of higher revenues. However, gross margin contracted 460 basis points to 19%. Inside gross profit grew 12.1% to $409 million. Meanwhile, Inside margin shrunk 50 basis points to 39.4% due to inflationary pressures in the prepared food and dispensed beverage category. This was partly offset by pricing actions and an increase in single-serve and smaller package-sized non-alcoholic and alcoholic beverages in the grocery and general merchandise category.
Adjusted EBITDA increased 17.8% year over year to $165.5 million during the quarter under discussion.
Casey's witnessed an increase of 15.2% in operating expenses of $490.9 million. The metric increased on account of operating 209 more stores compared with the same period last year, a jump in same-store employee expenses, and a rise in same-store credit card fees due to higher retail fuel prices.
Performance by Categories
We note that Fuel sales surged 62.2% year over year to $2,344.6 million during the quarter. Fuel gallons sold jumped 16% to 621.1 million. Fuel gallons same-store sales rose 1.5% during the quarter under discussion compared with a 6.4% jump in the year-ago period. Fuel gross profit rose 27.2% to $224.6 million due to an increase in fuel margin. We note that fuel margin increased to 36.2 cents per gallon from 33 cents per gallon in the prior-year period.
Grocery & General Merchandise sales rose 14.5% to $744 million during the quarter. Same-store sales increased 4.3% compared with 12.5% growth in the year-ago quarter. Grocery & General Merchandise margin expanded 70 basis points to 32.5%. Again, gross profit increased 17.2% to $242.1 million during the quarter.
Prepared Food & Dispensed Beverage sales rose 11.3% to $293.3 million. Same-store sales increased 7.6% compared with 13.4% in the year-ago quarter. Prepared Food & Dispensed Beverage margin contracted 320 basis points to 56.9%. We note that gross profit jumped 5.4% year over year to $167 million.
Store Update
During fiscal 2022, Casey's constructed 21 new stores, acquired 207 stores and closed 20. As of Apr 30, 2022, it operated 2,452 stores. The company expects to add approximately 80 stores in fiscal 2023.
Other Financial Aspects
Casey's ended the quarter with cash and cash equivalents of $158.9 million, long-term debt and finance lease obligations (net of current maturities) of $1,663.4 million and shareholders’ equity of $2,240.8 million.
During the quarter, Casey's did not make any share repurchases. The company has $400 million remaining under its existing share repurchase authorization.
The company’s board of directors raised the quarterly dividend for the 23rd straight year by 9% to 38 cents a share. The dividend is payable on Aug 15, 2022, to shareholders of record on Aug 1, 2022.
FY23 Outlook
Casey's envisions fiscal 2023 same-store inside sales to increase 4-6% and expects to maintain an inside margin of about 40%. Management anticipates same-store fuel gallons to be flat to up 2%. It guided an increase of approximately 9-10% in total operating expenses. The company expects to make an investment of roughly $450-$500 million in property and equipment in the fiscal year.
Shares of this Zacks Rank #3 (Hold) company have advanced 11.4% in the past three months compared with the industry’s growth of 9.5%.
3 Picks You Can’t Miss Out On
We have highlighted three better-ranked stocks, namely Kroger (KR - Free Report) , Tractor Supply Company (TSCO - Free Report) and Sysco Corporation (SYY - Free Report) .
Kroger, the renowned grocery retailer, carries a Zacks Rank #2 (Buy) at present. The company has an expected EPS growth rate of 9.9% for three-five years. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year sales and EPS suggests growth of 3.7% and 4.4%, respectively, from the year-ago reported numbers. KR has a trailing four-quarter earnings surprise of 22.1%, on average.
Tractor Supply Company, a rural lifestyle retailer in the United States, carries a Zacks Rank #2. The company has an expected EPS growth rate of 9.8% for three-five years.
The Zacks Consensus Estimate for Tractor Supply Company’s current financial year sales and EPS suggests growth of 8.8% and 10.6%, respectively, from the year-ago period. TSCO has a trailing four-quarter earnings surprise of 12.4%, on average.
Sysco Corporation, the leading global foodservice distribution company, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 9.1%, on average.
The Zacks Consensus Estimate for Sysco Corporation’s current financial year sales and EPS suggests growth of 32.6% and 124.3%, respectively, from the year-ago period. Sysco has an expected EPS growth rate of 11% for three-five years.