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Casey's (CASY) Lined Up for Q1 Earnings: Factors to Note

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Casey's General Stores, Inc. (CASY - Free Report) is likely to register an increase in the top line when it reports first-quarter fiscal 2023 numbers on Sep 7 after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $4,588 million, indicating an improvement of 44.2% from the prior-year reported figure.

The bottom line of this operator of convenience stores is expected to have increased year over year. The Zacks Consensus Estimate for first-quarter earnings per share has increased 15.7% to $3.84 over the past seven days. The figure suggests growth from the earnings of $3.19 in the year-ago period.

This Ankeny, Iowa-based company has a trailing four-quarter earnings surprise of 5.8%, on average. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 3.9%.

Key Factors to Note

Casey's price and product optimization strategies, increased penetration of private brands and digital engagements comprising mobile app and online ordering capabilities are commendable. The curbside pickup option and Casey’s reward program have been benefiting the overall performance. It has partnered with DoorDash and Uber Eats for delivery services. Also, the company’s self-distribution model and acquisition activities bode well. These factors are likely to have favorably impacted the company’s to-be-reported quarter’s top line.

Casey’s Grocery & General Merchandise category might have contributed to the company’s first-quarter top line. The Zacks Consensus Estimate for sales for the category is pegged at $923 million, which suggests an increase of 10.5% from the prior-year reported figure. The consensus mark indicates a jump of 4.1% in same-store sales.

Again, the company’s Prepared Food & Dispensed Beverage category may have positively impacted total revenues. The Zacks Consensus Estimate for sales for the category stands at $350 million, which indicates a jump of 13.5% from the prior-year reported figure. Also, the consensus mark suggests growth of 6.4% in same-store sales.

With the resumption of economic activities, things have started to improve. Remarkably, the Zacks Consensus Estimate suggests an increase of 6.1% in total gallons sold during the quarter under discussion. As a result, sales at the Fuel category might have risen year over year.

In spite of the aforementioned tailwinds, concerns related to higher operating expenses cannot be ignored. Casey's witnessed an increase of 15.2% in operating expenses in the last reported quarter. The metric increased due to operating 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.

What Does the Zacks Model Unveil?

Our proven model predicts an earnings beat for Casey's this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Casey's has a Zacks Rank #3 and an Earnings ESP of +11.33%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

3 More Stocks With the Favorable Combination

Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

Kroger (KR - Free Report) currently has an Earnings ESP of +4.42% and a Zacks Rank #2. The company is expected to register bottom-line growth when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for the quarterly earnings per share of 81 cents suggests growth of 1.3% from the year-ago quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kroger’s top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $34.4 billion, indicating an increase of 8.6% from the year-ago quarter. KR has a trailing four-quarter earnings surprise of 20.3%, on average.

Dave & Buster's Entertainment (PLAY - Free Report) currently has an Earnings ESP of +2.97% and a Zacks Rank #3. The company is likely to register a decline in the bottom line when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $1.01 suggests a decline of 5.6% from the year-ago quarter.

Dave & Buster's Entertainment’s top line is expected to have increased year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $432.3 million, which indicates an increase of 14.5% from the figure reported in the prior-year quarter. PLAY has a trailing four-quarter earnings surprise of 41.1%, on average.

Costco (COST - Free Report) currently has an Earnings ESP of +0.11% and a Zacks Rank #3. The company is likely to register a bottom-line improvement when it reports fourth-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $4.11 suggests an improvement from the $3.90 reported in the year-ago quarter.

Costco's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $71.85 billion, which indicates an improvement of 14.6% from the figure reported in the prior-year quarter. COST has a trailing four-quarter earnings surprise of 9.7%, on average.

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