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Casey's (CASY) Q1 Earnings Miss Estimates, Revenues Up Y/Y
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Casey's General Stores, Inc. (CASY - Free Report) came up with first-quarter fiscal 2023 results, wherein the top and bottom lines missed the Zacks Consensus Estimate. However, both metrics improved from the year-ago period due to robust Inside sales and a strong fuel margin.
A Closer Look at Results
Casey's, one of the leading convenience store chains in the United States, posted quarterly earnings of $4.09 per share, which fell short of the Zacks Consensus Estimate of $4.32 but improved sharply from $3.19 reported in the prior-year period.
The year-over-year jump in the bottom line can be attributed to higher fuel and merchandise contributions. This was partly offset by an increase in operating expenses, driven primarily from operating 74 more stores than a year ago, as well as an increase in credit card fees resulting from the record-high retail price of fuel.
Total revenues of $4,454.6 million missed the Zacks Consensus Estimate of $4,588 million but surged 40% year over year. Revenues grew across all three categories: Fuel, Grocery & General Merchandise and Prepared Food & Dispensed Beverage.
Inside sales jumped 10.7% to $1,266.6 million during the quarter. This increase was driven by the stellar performance in prepared food items, including pizza slices, hot breakfast sandwiches and burritos, as well as non-alcoholic and alcoholic beverages, salty snacks and candy from the grocery and general merchandise category.
Inside same-store sales increased 6.3% compared with an 8% rise registered in the year-ago period. The growth in the metric was driven by prepared food and dispensed beverages, most notably pizza slices, refreshed breakfast menu and cold dispensed beverages.
Casey's General Stores, Inc. Price, Consensus and EPS Surprise
The gross profit increased 15.5% year over year to $836.3 million due to higher revenues. However, the gross margin contracted 390 basis points to 18.8%. Inside gross profit grew 8.8% to $504.3 million. Meanwhile, Inside margin shrunk 70 basis points to 39.8%.
Adjusted EBITDA increased 20.6% year over year to $293.2 million during the quarter under discussion.
Casey's witnessed an increase of 13.4% in operating expenses of $543.3 million. The metric increased for operating 74 more stores compared with the same period last year, higher long-term incentive compensations and a rise in same-store credit card fees due to a jump in retail fuel prices.
Performance by Categories
We note that Fuel sales surged 57.4% year over year to $3,096.3 million during the quarter due to an increase of 52.4% in the average retail price per gallon and a jump in the number of gallons sold. Fuel gallons sold jumped 3.3% to 689.5 million due to the increase in the store count.
Fuel gallons same-store sales declined 2.3% during the quarter under discussion against a 9% increase in the year-ago period as volumes were impacted by the high retail fuel price. Fuel gross profit rose 31.4% to $308.2 million, given the favorable environment due to declining wholesale costs. We note that the fuel margin increased to 44.7 cents per gallon from 35.1 cents per gallon in the prior-year period.
Grocery & General Merchandise sales rose 10.5% to $923.1 million during the quarter due to the robust sales of packaged beverages, salty snacks and candy. Same-store sales increased 5.5% compared with 7% growth in the year-ago quarter. Grocery & General Merchandise margin expanded 90 basis points to 33.9%. Again, the gross profit increased 13.8% to $313.3 million during the quarter.
Prepared Food & Dispensed Beverage sales rose 11.4% to $343.6 million due to the increased sales of pizza slices as well as breakfast sandwiches and burritos. Same-store sales increased 8.4% compared with 10.8% in the year-ago quarter.
Prepared Food & Dispensed Beverage margin contracted 540 basis points to 55.6% due to higher ingredient costs, primarily cheese. This was partly offset by retail price adjustments. We note that the gross profit jumped 1.5% year over year to $191 million.
Store Update
During the quarter, Casey's constructed two new stores, acquired one store and closed one. As of Jul 31, 2022, it operated 2,454 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 $312.4 million, long-term debt and finance lease obligations (net of current maturities) of $1,639.2 million and shareholders’ equity of $2,380 million.
During the quarter, Casey's did not make any share repurchases. The company has $400 million remaining under its existing share repurchase authorization.
FY23 Outlook
Casey's continues to estimate fiscal 2023 same-store Inside sales to increase 4-6% and expects to maintain an Inside margin of about 40%. Management reiterated the same-store fuel gallon projection of flat to up 2%.
Casey's continues to expect an increase of approximately 9-10% in total operating expenses. The company expects to make an investment of roughly $450 to $500 million in plant and equipment in the fiscal year.
Shares of this Zacks Rank #3 (Hold) company have advanced 19.6% in the past six months compared with the industry’s growth of 20.5%.
Dillard's, which operates retail department stores, currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of nearly 215%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dillard's current financial-year sales suggests growth of nearly 4.8% from the year-ago period.
Ulta Beauty, which operates as a retailer of beauty products, presently sports a Zacks Rank #1. Ulta Beauty has a trailing four-quarter earnings surprise of 32.8%, on average. ULTA has an expected EPS growth rate of 11.9% for three to five years.
The Zacks Consensus Estimate for Ulta Beauty’s current financial-year sales suggests growth of 13.7% from the year-ago reported number.
Arhaus, which operates as a lifestyle brand and a premium retailer, currently carries a Zacks Rank #2 (Buy). ARHS has an expected EPS growth rate of 14.3% for three to five years.
The Zacks Consensus Estimate for Arhaus’ current financial-year revenues and EPS suggests growth of 49.2% and 5.8%, respectively, from the year-ago reported figure. ARHS has a trailing four-quarter earnings surprise of 92%, on average.
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Casey's (CASY) Q1 Earnings Miss Estimates, Revenues Up Y/Y
Casey's General Stores, Inc. (CASY - Free Report) came up with first-quarter fiscal 2023 results, wherein the top and bottom lines missed the Zacks Consensus Estimate. However, both metrics improved from the year-ago period due to robust Inside sales and a strong fuel margin.
A Closer Look at Results
Casey's, one of the leading convenience store chains in the United States, posted quarterly earnings of $4.09 per share, which fell short of the Zacks Consensus Estimate of $4.32 but improved sharply from $3.19 reported in the prior-year period.
The year-over-year jump in the bottom line can be attributed to higher fuel and merchandise contributions. This was partly offset by an increase in operating expenses, driven primarily from operating 74 more stores than a year ago, as well as an increase in credit card fees resulting from the record-high retail price of fuel.
Total revenues of $4,454.6 million missed the Zacks Consensus Estimate of $4,588 million but surged 40% year over year. Revenues grew across all three categories: Fuel, Grocery & General Merchandise and Prepared Food & Dispensed Beverage.
Inside sales jumped 10.7% to $1,266.6 million during the quarter. This increase was driven by the stellar performance in prepared food items, including pizza slices, hot breakfast sandwiches and burritos, as well as non-alcoholic and alcoholic beverages, salty snacks and candy from the grocery and general merchandise category.
Inside same-store sales increased 6.3% compared with an 8% rise registered in the year-ago period. The growth in the metric was driven by prepared food and dispensed beverages, most notably pizza slices, refreshed breakfast menu and cold dispensed 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
The gross profit increased 15.5% year over year to $836.3 million due to higher revenues. However, the gross margin contracted 390 basis points to 18.8%. Inside gross profit grew 8.8% to $504.3 million. Meanwhile, Inside margin shrunk 70 basis points to 39.8%.
Adjusted EBITDA increased 20.6% year over year to $293.2 million during the quarter under discussion.
Casey's witnessed an increase of 13.4% in operating expenses of $543.3 million. The metric increased for operating 74 more stores compared with the same period last year, higher long-term incentive compensations and a rise in same-store credit card fees due to a jump in retail fuel prices.
Performance by Categories
We note that Fuel sales surged 57.4% year over year to $3,096.3 million during the quarter due to an increase of 52.4% in the average retail price per gallon and a jump in the number of gallons sold. Fuel gallons sold jumped 3.3% to 689.5 million due to the increase in the store count.
Fuel gallons same-store sales declined 2.3% during the quarter under discussion against a 9% increase in the year-ago period as volumes were impacted by the high retail fuel price. Fuel gross profit rose 31.4% to $308.2 million, given the favorable environment due to declining wholesale costs. We note that the fuel margin increased to 44.7 cents per gallon from 35.1 cents per gallon in the prior-year period.
Grocery & General Merchandise sales rose 10.5% to $923.1 million during the quarter due to the robust sales of packaged beverages, salty snacks and candy. Same-store sales increased 5.5% compared with 7% growth in the year-ago quarter. Grocery & General Merchandise margin expanded 90 basis points to 33.9%. Again, the gross profit increased 13.8% to $313.3 million during the quarter.
Prepared Food & Dispensed Beverage sales rose 11.4% to $343.6 million due to the increased sales of pizza slices as well as breakfast sandwiches and burritos. Same-store sales increased 8.4% compared with 10.8% in the year-ago quarter.
Prepared Food & Dispensed Beverage margin contracted 540 basis points to 55.6% due to higher ingredient costs, primarily cheese. This was partly offset by retail price adjustments. We note that the gross profit jumped 1.5% year over year to $191 million.
Store Update
During the quarter, Casey's constructed two new stores, acquired one store and closed one. As of Jul 31, 2022, it operated 2,454 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 $312.4 million, long-term debt and finance lease obligations (net of current maturities) of $1,639.2 million and shareholders’ equity of $2,380 million.
During the quarter, Casey's did not make any share repurchases. The company has $400 million remaining under its existing share repurchase authorization.
FY23 Outlook
Casey's continues to estimate fiscal 2023 same-store Inside sales to increase 4-6% and expects to maintain an Inside margin of about 40%. Management reiterated the same-store fuel gallon projection of flat to up 2%.
Casey's continues to expect an increase of approximately 9-10% in total operating expenses. The company expects to make an investment of roughly $450 to $500 million in plant and equipment in the fiscal year.
Shares of this Zacks Rank #3 (Hold) company have advanced 19.6% in the past six months compared with the industry’s growth of 20.5%.
3 Picks You Can’t Miss Out On
Here we have highlighted three better-ranked stocks, namely Dillard's (DDS - Free Report) , Ulta Beauty (ULTA - Free Report) and Arhaus (ARHS - Free Report) .
Dillard's, which operates retail department stores, currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of nearly 215%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dillard's current financial-year sales suggests growth of nearly 4.8% from the year-ago period.
Ulta Beauty, which operates as a retailer of beauty products, presently sports a Zacks Rank #1. Ulta Beauty has a trailing four-quarter earnings surprise of 32.8%, on average. ULTA has an expected EPS growth rate of 11.9% for three to five years.
The Zacks Consensus Estimate for Ulta Beauty’s current financial-year sales suggests growth of 13.7% from the year-ago reported number.
Arhaus, which operates as a lifestyle brand and a premium retailer, currently carries a Zacks Rank #2 (Buy). ARHS has an expected EPS growth rate of 14.3% for three to five years.
The Zacks Consensus Estimate for Arhaus’ current financial-year revenues and EPS suggests growth of 49.2% and 5.8%, respectively, from the year-ago reported figure. ARHS has a trailing four-quarter earnings surprise of 92%, on average.