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Casey's (CASY) Q3 Earnings Top Estimates, Revenues Up Y/Y
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Casey's General Stores, Inc. (CASY - Free Report) reported third-quarter fiscal 2022 results, wherein the top line missed the Zacks Consensus Estimate, while the bottom line surpassed the same. Markedly, both the top and the bottom lines increased year over year.
A Closer Look at Results
Casey's posted quarterly earnings of $1.71 per share that beat the Zacks Consensus Estimate of $1.45 and improved from $1.04 in the prior-year period. This year-over-year jump in the bottom line was owing to higher gross profit from inside the store and fuel, partly offset by increased operating expenses on account of operating 202 additional stores, rise in wage rates, as well as credit card fees on account of the higher retail price of fuel.
Total revenues of $3,048.7 million surged 51.8% year over year but lagged the Zacks Consensus Estimate of $3,058 million. Revenues grew across all three categories: Fuel, Grocery & General Merchandise, and Prepared Food & Dispensed Beverage.
Inside sales jumped 15.4% to $1,025.4 million during the quarter under review. Inside same-store sales increased 7.6% compared with a 2.1% rise registered in the year-ago period. The metric improved on account of sturdy performance in non-alcoholic beverages, grocery items such as salty snacks and candy, and prepared food items such as pizza slices and hot breakfast sandwiches.
Margins & Expenses
Gross profit increased 23% year over year to $664.5 million, courtesy of higher revenues. However, gross margin contracted 510 basis points to 21.8%. Inside gross profit grew 14.9% to $403.8 million. Meanwhile, Inside margin shrunk 20 basis points to 39.4% owing to a rise in the cost of ingredients and pizza toppings within the prepared food and dispensed beverage category partly offset by menu price increases.
Adjusted EBITDA increased 36.9% year over year to $174.3 million as higher gross profit from inside the store and fuel was partly offset by an increase in operating expenses on account of rising in wage rates and credit card fees as well as operating 202 additional stores.
Casey's witnessed an increase of 18.5% in operating expenses of $491 million. The metric increased on account of operating 202 more stores compared with the same period last year, jump in same-store employee expenses, rise in same-store credit card fees due to higher retail fuel prices and increased sales volume, and incentive compensation.
Casey's General Stores, Inc. Price, Consensus and EPS Surprise
We note that Fuel sales surged 77.3% year over year to $1,951.4 million during the quarter. Well, Fuel gallons sold jumped 19.9% to 621.8 million. Same-store gallons sold were favorably impacted by improved guest traffic. Fuel gallons same-store sales rose 5.7% during the quarter under discussion against a decline of 12.1% in the year-ago period. Fuel gross profit rose 39.6% to $237.9 million. Fuel margin increased to 38.3 cents per gallon from 32.9 cents per gallon in the prior-year period.
Grocery & General Merchandise sales rose 17.3% to $732.5 million due to operating 202 more stores than a year ago and robust sales of packaged beverages, salty snacks, and candy. Same-store sales increased 7.7% compared with 5.4% growth in the year-ago quarter. Grocery & General Merchandise margin expanded 130 basis points to 32%, favorably impacted by the private label program, procurement initiatives, and price increases, offset by inflationary pressures. Again, gross profit increased 22.2% to $234.1 million during the quarter.
Prepared Food & Dispensed Beverage sales rose 10.9% to $292.9 million due to operating 202 more stores than a year ago, higher sales of pizza slices, and the breakfast menu relaunch. Same-store sales increased 7.4% against a decline of 5% in the year-ago quarter. Prepared Food & Dispensed Beverage margin contracted 260 basis points to 58% due to cost increases for ingredients and pizza toppings, offset by menu price increases. We note that gross profit jumped 6.1% year over year to $169.8 million.
Store Update
During the nine-month period ended Jan 31, 2022, Casey's constructed 11 new stores, acquired 191 stores and closed 13. As of Jan 31, 2022, it operated 2,431 stores. The company completed the acquisition of 40 stores from Pilot Corporation. It plans to add roughly 225 stores during fiscal 2022.
Other Financial Aspects
Casey's ended the quarter with cash and cash equivalents of $186.9 million, long-term debt and finance lease obligations (net of current maturities) of $1,766 million and shareholders’ equity of $2,185.6 million. During the quarter, the company did not make any share repurchases. On and effective as of Mar 3, 2022, the board of directors authorized an extension and expansion of its existing $300 million share repurchase program to a total amount of up to $400 million.
FY22 Outlook
Casey's continues to envision same-store fuel and inside sales to rise in mid-single-digit percentages for fiscal 2022. Management foresees operating expenses to increase in the high-teen percentages. For the final quarter of fiscal 2022, operating expenses are anticipated to increase in the band of 11-13%. The company expects to make an investment of roughly $400 million in property and equipment in the fiscal year.
Shares of this Zacks Rank #2 (Buy) company have fallen 12.9% so far in the year compared with the industry’s decline of 11.8%.
3 Picks You Can’t Miss Out On
We have highlighted three other top-ranked stocks, namely, Target (TGT - Free Report) , Tractor Supply Company (TSCO - Free Report) and Sprouts Farmers Market (SFM - Free Report) .
The Zacks Consensus Estimate for Target’s current financial year sales and EPS suggests growth of 3.5% and 6.7%, respectively, from the year-ago period. TGT has a trailing four-quarter earnings surprise of 21.3%, 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 8.2% and 8.4%, respectively, from the year-ago period. TSCO has a trailing four-quarter earnings surprise of 22%, on average.
Sprouts Farmers, which offers fresh, natural, and organic food products, carries a Zacks Rank #2. The company has an expected EPS growth rate of 7.3% for three-five years.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial year sales and EPS suggests growth of 4.7% and 4.8%, respectively, from the year-ago period. SFM has a trailing four-quarter earnings surprise of 17.9%, on average.
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Casey's (CASY) Q3 Earnings Top Estimates, Revenues Up Y/Y
Casey's General Stores, Inc. (CASY - Free Report) reported third-quarter fiscal 2022 results, wherein the top line missed the Zacks Consensus Estimate, while the bottom line surpassed the same. Markedly, both the top and the bottom lines increased year over year.
A Closer Look at Results
Casey's posted quarterly earnings of $1.71 per share that beat the Zacks Consensus Estimate of $1.45 and improved from $1.04 in the prior-year period. This year-over-year jump in the bottom line was owing to higher gross profit from inside the store and fuel, partly offset by increased operating expenses on account of operating 202 additional stores, rise in wage rates, as well as credit card fees on account of the higher retail price of fuel.
Total revenues of $3,048.7 million surged 51.8% year over year but lagged the Zacks Consensus Estimate of $3,058 million. Revenues grew across all three categories: Fuel, Grocery & General Merchandise, and Prepared Food & Dispensed Beverage.
Inside sales jumped 15.4% to $1,025.4 million during the quarter under review. Inside same-store sales increased 7.6% compared with a 2.1% rise registered in the year-ago period. The metric improved on account of sturdy performance in non-alcoholic beverages, grocery items such as salty snacks and candy, and prepared food items such as pizza slices and hot breakfast sandwiches.
Margins & Expenses
Gross profit increased 23% year over year to $664.5 million, courtesy of higher revenues. However, gross margin contracted 510 basis points to 21.8%. Inside gross profit grew 14.9% to $403.8 million. Meanwhile, Inside margin shrunk 20 basis points to 39.4% owing to a rise in the cost of ingredients and pizza toppings within the prepared food and dispensed beverage category partly offset by menu price increases.
Adjusted EBITDA increased 36.9% year over year to $174.3 million as higher gross profit from inside the store and fuel was partly offset by an increase in operating expenses on account of rising in wage rates and credit card fees as well as operating 202 additional stores.
Casey's witnessed an increase of 18.5% in operating expenses of $491 million. The metric increased on account of operating 202 more stores compared with the same period last year, jump in same-store employee expenses, rise in same-store credit card fees due to higher retail fuel prices and increased sales volume, and incentive compensation.
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
Performance by Categories
We note that Fuel sales surged 77.3% year over year to $1,951.4 million during the quarter. Well, Fuel gallons sold jumped 19.9% to 621.8 million. Same-store gallons sold were favorably impacted by improved guest traffic. Fuel gallons same-store sales rose 5.7% during the quarter under discussion against a decline of 12.1% in the year-ago period. Fuel gross profit rose 39.6% to $237.9 million. Fuel margin increased to 38.3 cents per gallon from 32.9 cents per gallon in the prior-year period.
Grocery & General Merchandise sales rose 17.3% to $732.5 million due to operating 202 more stores than a year ago and robust sales of packaged beverages, salty snacks, and candy. Same-store sales increased 7.7% compared with 5.4% growth in the year-ago quarter. Grocery & General Merchandise margin expanded 130 basis points to 32%, favorably impacted by the private label program, procurement initiatives, and price increases, offset by inflationary pressures. Again, gross profit increased 22.2% to $234.1 million during the quarter.
Prepared Food & Dispensed Beverage sales rose 10.9% to $292.9 million due to operating 202 more stores than a year ago, higher sales of pizza slices, and the breakfast menu relaunch. Same-store sales increased 7.4% against a decline of 5% in the year-ago quarter. Prepared Food & Dispensed Beverage margin contracted 260 basis points to 58% due to cost increases for ingredients and pizza toppings, offset by menu price increases. We note that gross profit jumped 6.1% year over year to $169.8 million.
Store Update
During the nine-month period ended Jan 31, 2022, Casey's constructed 11 new stores, acquired 191 stores and closed 13. As of Jan 31, 2022, it operated 2,431 stores. The company completed the acquisition of 40 stores from Pilot Corporation. It plans to add roughly 225 stores during fiscal 2022.
Other Financial Aspects
Casey's ended the quarter with cash and cash equivalents of $186.9 million, long-term debt and finance lease obligations (net of current maturities) of $1,766 million and shareholders’ equity of $2,185.6 million. During the quarter, the company did not make any share repurchases. On and effective as of Mar 3, 2022, the board of directors authorized an extension and expansion of its existing $300 million share repurchase program to a total amount of up to $400 million.
FY22 Outlook
Casey's continues to envision same-store fuel and inside sales to rise in mid-single-digit percentages for fiscal 2022. Management foresees operating expenses to increase in the high-teen percentages. For the final quarter of fiscal 2022, operating expenses are anticipated to increase in the band of 11-13%. The company expects to make an investment of roughly $400 million in property and equipment in the fiscal year.
Shares of this Zacks Rank #2 (Buy) company have fallen 12.9% so far in the year compared with the industry’s decline of 11.8%.
3 Picks You Can’t Miss Out On
We have highlighted three other top-ranked stocks, namely, Target (TGT - Free Report) , Tractor Supply Company (TSCO - Free Report) and Sprouts Farmers Market (SFM - Free Report) .
Target, a general merchandise retailer, carries a Zacks Rank #2. The company has an expected EPS growth rate of 16.5% 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 Target’s current financial year sales and EPS suggests growth of 3.5% and 6.7%, respectively, from the year-ago period. TGT has a trailing four-quarter earnings surprise of 21.3%, 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 8.2% and 8.4%, respectively, from the year-ago period. TSCO has a trailing four-quarter earnings surprise of 22%, on average.
Sprouts Farmers, which offers fresh, natural, and organic food products, carries a Zacks Rank #2. The company has an expected EPS growth rate of 7.3% for three-five years.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial year sales and EPS suggests growth of 4.7% and 4.8%, respectively, from the year-ago period. SFM has a trailing four-quarter earnings surprise of 17.9%, on average.