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Casey's (CASY) Operational Efforts Help Widen the Spectrum
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Casey's General Stores, Inc.’s (CASY - Free Report) business operating model, omnichannel capabilities, enhanced customer reach and private-label offerings reinforce its position in the industry.
Let’s Analyze
Casey's price and product optimization strategies, increased penetration of private brands and digital engagements comprising the mobile app and online ordering capabilities are commendable. This third-largest convenience retailer and fifth-largest pizza chain’s self-distribution model, strength in the Inside category and acquisition activities bode well. The same was reflected in third-quarter fiscal 2023 results, wherein the top and bottom lines grew year over year.
Total revenues of $3,332.6 million climbed 9.3% year over year. Revenues grew across all three categories — Fuel, Grocery & General Merchandise and Prepared Food & Dispensed Beverage. We note that Fuel sales rose 10.5% year over year to $2,157.2 million during the quarter due to an increase of 6.6% in the average retail price per gallon and a jump in the number of gallons sold. Fuel gallons sold jumped 3.7% to 644.9 million due to a rise in the store count.
Image Source: Zacks Investment Research
Inside sales comprising Grocery & General Merchandise and Prepared Food & Dispensed Beverage jumped 8.2% to $1,109.2 million in the quarter. This increase was driven by the stellar performance in the Grocery & General Merchandise category, including non-alcoholic and alcoholic beverages, snacks and candy, as well as pizza slices and donuts in the Prepared Food & Dispensed Beverage category. Inside same-store sales increased 5.6% compared with a 7.6% rise registered in the year-ago period.
While Grocery & General Merchandise sales advanced 8.6% to $795.7 million, Prepared Food & Dispensed Beverage sales increased 7% to $313.5 million in the quarter.
Casey’s focus on technology advancements, merchandise ordering efficiency, inventory management and data analytics positions it well for future growth. The company has been strengthening pizza promotions for guests seeking meal solutions along with enhancing breakfast lineups. Moreover, it has been increasing the penetration of private brands.
CASY’s digital engagements help create a seamless shopping experience and facilitate same-store sales growth. The company’s mobile app now represents 69% of all digital revenues. Management remains optimistic about Casey's Rewards program, which exceeded 6.1 million members. Further, Casey's is enhancing delivery capabilities via DoorDash and Uber Eats.
The convenience store chain has been steadily expanding its store base to boost sales. Progressing along such lines, Casey's acquired Buchanan Energy, known for its Bucky’s Convenience Stores and 48 Circle-K stores, primarily in Oklahoma City. The Buchanan Energy transaction included 92 retail locations (24 stores in Nebraska, 56 in Illinois, five in Iowa, three in Missouri and four in Texas) and a dealer network of 81 stores. Casey's also closed the buyout of 40 stores from Pilot Corporation.
Wrapping Up
Casey’s business model, private-label offerings, expansion of its footprint and digitization endeavors should support sales. The company envisions fiscal 2023 same-store Inside sales to increase 6-7%, up from the prior view of 5-7%. Further, Casey’s anticipates an Inside margin of about 40%.
Shares of this Zacks Rank #2 (Buy) company have risen 8.8% in the past six months compared with the industry’s growth of 13%.
3 More Stocks Looking Red Hot
Here we have highlighted three other top-ranked stocks, namely Kroger (KR - Free Report) , Sprouts Farmers (SFM - Free Report) and General Mills (GIS - Free Report) .
Kroger, which functions as a supermarket operator, currently sports a Zacks Rank #1 (Strong Buy). The expected EPS growth rate for three to five years is 6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 2.5% and 6.6%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 9.8%, on average.
Sprouts Farmers, which retails fresh, natural and organic food products, carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 9.5%.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings suggests growth of 5.2% and 5.4% from the year-ago period. SFM has a trailing four-quarter earnings surprise of 12.5%, on average.
General Mills, which manufactures and markets branded consumer foods, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 7.5%.
The Zacks Consensus Estimate for General Mills’ current financial-year sales and earnings suggests growth of 6.3% and 7.4% from the year-ago period. GIS has a trailing four-quarter earnings surprise of 8.1%, on average.
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Casey's (CASY) Operational Efforts Help Widen the Spectrum
Casey's General Stores, Inc.’s (CASY - Free Report) business operating model, omnichannel capabilities, enhanced customer reach and private-label offerings reinforce its position in the industry.
Let’s Analyze
Casey's price and product optimization strategies, increased penetration of private brands and digital engagements comprising the mobile app and online ordering capabilities are commendable. This third-largest convenience retailer and fifth-largest pizza chain’s self-distribution model, strength in the Inside category and acquisition activities bode well. The same was reflected in third-quarter fiscal 2023 results, wherein the top and bottom lines grew year over year.
Total revenues of $3,332.6 million climbed 9.3% year over year. Revenues grew across all three categories — Fuel, Grocery & General Merchandise and Prepared Food & Dispensed Beverage. We note that Fuel sales rose 10.5% year over year to $2,157.2 million during the quarter due to an increase of 6.6% in the average retail price per gallon and a jump in the number of gallons sold. Fuel gallons sold jumped 3.7% to 644.9 million due to a rise in the store count.
Image Source: Zacks Investment Research
Inside sales comprising Grocery & General Merchandise and Prepared Food & Dispensed Beverage jumped 8.2% to $1,109.2 million in the quarter. This increase was driven by the stellar performance in the Grocery & General Merchandise category, including non-alcoholic and alcoholic beverages, snacks and candy, as well as pizza slices and donuts in the Prepared Food & Dispensed Beverage category. Inside same-store sales increased 5.6% compared with a 7.6% rise registered in the year-ago period.
While Grocery & General Merchandise sales advanced 8.6% to $795.7 million, Prepared Food & Dispensed Beverage sales increased 7% to $313.5 million in the quarter.
Casey’s focus on technology advancements, merchandise ordering efficiency, inventory management and data analytics positions it well for future growth. The company has been strengthening pizza promotions for guests seeking meal solutions along with enhancing breakfast lineups. Moreover, it has been increasing the penetration of private brands.
CASY’s digital engagements help create a seamless shopping experience and facilitate same-store sales growth. The company’s mobile app now represents 69% of all digital revenues. Management remains optimistic about Casey's Rewards program, which exceeded 6.1 million members. Further, Casey's is enhancing delivery capabilities via DoorDash and Uber Eats.
The convenience store chain has been steadily expanding its store base to boost sales. Progressing along such lines, Casey's acquired Buchanan Energy, known for its Bucky’s Convenience Stores and 48 Circle-K stores, primarily in Oklahoma City. The Buchanan Energy transaction included 92 retail locations (24 stores in Nebraska, 56 in Illinois, five in Iowa, three in Missouri and four in Texas) and a dealer network of 81 stores. Casey's also closed the buyout of 40 stores from Pilot Corporation.
Wrapping Up
Casey’s business model, private-label offerings, expansion of its footprint and digitization endeavors should support sales. The company envisions fiscal 2023 same-store Inside sales to increase 6-7%, up from the prior view of 5-7%. Further, Casey’s anticipates an Inside margin of about 40%.
Shares of this Zacks Rank #2 (Buy) company have risen 8.8% in the past six months compared with the industry’s growth of 13%.
3 More Stocks Looking Red Hot
Here we have highlighted three other top-ranked stocks, namely Kroger (KR - Free Report) , Sprouts Farmers (SFM - Free Report) and General Mills (GIS - Free Report) .
Kroger, which functions as a supermarket operator, currently sports a Zacks Rank #1 (Strong Buy). The expected EPS growth rate for three to five years is 6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 2.5% and 6.6%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 9.8%, on average.
Sprouts Farmers, which retails fresh, natural and organic food products, carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 9.5%.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings suggests growth of 5.2% and 5.4% from the year-ago period. SFM has a trailing four-quarter earnings surprise of 12.5%, on average.
General Mills, which manufactures and markets branded consumer foods, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 7.5%.
The Zacks Consensus Estimate for General Mills’ current financial-year sales and earnings suggests growth of 6.3% and 7.4% from the year-ago period. GIS has a trailing four-quarter earnings surprise of 8.1%, on average.