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Casey's (CASY) Down 3.7% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Casey's General Stores (CASY - Free Report) . Shares have lost about 3.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Casey's due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Casey's Tops Q1 Earnings Estimates, Records Strong Inside Margin
Casey's reported first-quarter fiscal 2025 results, wherein the top line lagged the Zacks Consensus Estimate and the bottom line surpassed the same. However, both metrics improved year over year. The company demonstrated strength in inside same-store sales, underscoring its ability to engage customers effectively.
More on Casey's Q1 Results
CASY, one of the leading convenience store chains in the United States, posted quarterly earnings of $4.83 per share, which surpassed the Zacks Consensus Estimate of $4.54 and increased 6.9% from earnings of $4.52 in the prior-year period.
Total revenues of $4,097.7 million missed the Zacks Consensus Estimate of $4,112 million and rose 5.9% year over year.
Total inside sales jumped 7.6% year over year to $1.47 billion in the quarter. This was due to strong performances in the prepared food and dispensed beverage categories, which included hot sandwiches, bakery items, and non-alcoholic and alcoholic beverages in the grocery and general merchandise segment. Inside same-store sales increased 2.3% compared with a 5.4% rise registered in the year-ago period.
Insight Into CASY’s Margins & Expenses
Gross profit rose 8.8% year over year to $955.3 million in the quarter. The gross margin expanded 60 basis points to 23.3%.
The total inside gross profit increased 10.4% year over year to $614.3 million. Meanwhile, the inside margin increased 110 basis points to 41.7% due to the proactive cost of goods management and product mix.
EBITDA increased 9.1% year over year to $345.8 million in the quarter under discussion, whereas the EBITDA margin expanded 20 basis points to 8.4%. This can be attributed to higher inside margin and fuel margin, partially offset by increased operating expenses due to operating 138 additional stores.
The company witnessed a rise of 8.7% in operating expenses of $609.5 million.
Update on Casey's Performance of Categories
Prepared Food & Dispensed Beverage sales rose 8.7% year over year to $405.1 million. Same-store sales increased 4.4% compared with 5.9% in the year-ago quarter. The Prepared Food & Dispensed Beverage margin increased to 58.3% from 58.2% in the year-ago period.
Grocery & General Merchandise sales rose 7.2% to $1.07 billion in the quarter. Same-store sales increased 1.6% compared with 5.2% growth in the year-ago quarter. The Grocery & General Merchandise margin increased to 35.4% from 34.1% in the year-ago period.
We note that Fuel sales improved 5.3% year over year to $2.56 billion in the quarter. Fuel gallons sold jumped 8.2% to $772.5 million due to an increase in store count.
Fuel gallons same-store sales rose 0.7% year over year. The fuel margin decreased to 40.7 cents per gallon from 41.6 cents in the prior-year period.
Casey's ended the quarter with cash and cash equivalents of $305 million, long-term debt and finance lease obligations (net of current maturities) of $1.40 billion, and shareholders’ equity of $3.16 billion. In the fiscal first quarter, the company did not repurchase any shares. Approximately $295 million remains available under the current share repurchase authorization.
Update on Casey's Stores
As of July 31, 2024, the company operated 2,674 stores.
CASY’s FY25 Guidance
For fiscal 2025, Casey's expects inside same-store sales to increase 3-5% and anticipates an inside margin of 41% compared with fiscal 2024. Management foresees same-store fuel gallons sold between negative 1% and positive 1%. It expects fiscal 2025 EBITDA growth to be at least 8%. The company anticipates total operating expenses to increase 6-8%. It expects to invest $575 million in fiscal 2025.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, Casey's has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Casey's has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Casey's (CASY) Down 3.7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Casey's General Stores (CASY - Free Report) . Shares have lost about 3.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Casey's due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Casey's Tops Q1 Earnings Estimates, Records Strong Inside Margin
Casey's reported first-quarter fiscal 2025 results, wherein the top line lagged the Zacks Consensus Estimate and the bottom line surpassed the same. However, both metrics improved year over year. The company demonstrated strength in inside same-store sales, underscoring its ability to engage customers effectively.
More on Casey's Q1 Results
CASY, one of the leading convenience store chains in the United States, posted quarterly earnings of $4.83 per share, which surpassed the Zacks Consensus Estimate of $4.54 and increased 6.9% from earnings of $4.52 in the prior-year period.
Total revenues of $4,097.7 million missed the Zacks Consensus Estimate of $4,112 million and rose 5.9% year over year.
Total inside sales jumped 7.6% year over year to $1.47 billion in the quarter. This was due to strong performances in the prepared food and dispensed beverage categories, which included hot sandwiches, bakery items, and non-alcoholic and alcoholic beverages in the grocery and general merchandise segment. Inside same-store sales increased 2.3% compared with a 5.4% rise registered in the year-ago period.
Insight Into CASY’s Margins & Expenses
Gross profit rose 8.8% year over year to $955.3 million in the quarter. The gross margin expanded 60 basis points to 23.3%.
The total inside gross profit increased 10.4% year over year to $614.3 million. Meanwhile, the inside margin increased 110 basis points to 41.7% due to the proactive cost of goods management and product mix.
EBITDA increased 9.1% year over year to $345.8 million in the quarter under discussion, whereas the EBITDA margin expanded 20 basis points to 8.4%. This can be attributed to higher inside margin and fuel margin, partially offset by increased operating expenses due to operating 138 additional stores.
The company witnessed a rise of 8.7% in operating expenses of $609.5 million.
Update on Casey's Performance of Categories
Prepared Food & Dispensed Beverage sales rose 8.7% year over year to $405.1 million. Same-store sales increased 4.4% compared with 5.9% in the year-ago quarter. The Prepared Food & Dispensed Beverage margin increased to 58.3% from 58.2% in the year-ago period.
Grocery & General Merchandise sales rose 7.2% to $1.07 billion in the quarter. Same-store sales increased 1.6% compared with 5.2% growth in the year-ago quarter. The Grocery & General Merchandise margin increased to 35.4% from 34.1% in the year-ago period.
We note that Fuel sales improved 5.3% year over year to $2.56 billion in the quarter. Fuel gallons sold jumped 8.2% to $772.5 million due to an increase in store count.
Fuel gallons same-store sales rose 0.7% year over year. The fuel margin decreased to 40.7 cents per gallon from 41.6 cents in the prior-year period.
CASY’s Financial Snapshot: Cash, Debt & Equity Overview
Casey's ended the quarter with cash and cash equivalents of $305 million, long-term debt and finance lease obligations (net of current maturities) of $1.40 billion, and shareholders’ equity of $3.16 billion. In the fiscal first quarter, the company did not repurchase any shares. Approximately $295 million remains available under the current share repurchase authorization.
Update on Casey's Stores
As of July 31, 2024, the company operated 2,674 stores.
CASY’s FY25 Guidance
For fiscal 2025, Casey's expects inside same-store sales to increase 3-5% and anticipates an inside margin of 41% compared with fiscal 2024. Management foresees same-store fuel gallons sold between negative 1% and positive 1%. It expects fiscal 2025 EBITDA growth to be at least 8%. The company anticipates total operating expenses to increase 6-8%. It expects to invest $575 million in fiscal 2025.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, Casey's has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Casey's has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.