We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Casey's (CASY) Q3 Earnings Top, Inside Same-Store Sales Up 5.6%
Read MoreHide Full Article
Casey's General Stores, Inc. (CASY - Free Report) reported third-quarter fiscal 2023 results, wherein the top line missed the Zacks Consensus Estimate, while the bottom line beat the same. Impressively, both metrics improved from the year-ago period. Inside same-store sales also grew year over year. Results gained from prepared food and dispensed beverages, most notably pizza and donut sales, as well as strength in grocery and general merchandise in both alcoholic and non-alcoholic beverages.
A Closer Look at Results
Casey's, one of the leading convenience store chains in the United States, posted adjusted quarterly earnings of $2.36 per share, which beat the Zacks Consensus Estimate of $1.83 and increased from earnings of $1.71 reported in the prior-year period. Including a one-time benefit of approximately $15 million (or 31 cents a share) from the resolution of a legal matter, quarterly earnings came in at $2.67 per share.
The year-over-year jump in the bottom line can be attributed to higher profitability in fuel and inside the store. This was partly offset by an increase in operating expenses, driven primarily by operating 41 more stores than a year ago.
Casey's General Stores, Inc. Price, Consensus and EPS Surprise
Total revenues of $3,332.6 million increased 9.3% year over year but missed the Zacks Consensus Estimate of $3,354 million. Revenues grew across all categories.
Inside sales jumped 8.2% to $1,109.2 million during the quarter. This increase was driven by the stellar performance in the grocery and general merchandise category, including non-alcoholic and alcoholic beverages, snacks and candy as well as pizza slices and donuts in the prepared food and dispensed beverage category.
Inside same-store sales increased 5.6% compared with a 7.6% rise registered in the year-ago period. The metric grew 13.6% on a two-year basis.
Margins & Expenses
The gross profit increased 11% year over year to $737.5 million due to higher revenues. The gross margin expanded 30 basis points (bps) to 22.1%. Inside gross profit grew 11.6% to $450.6 million. Meanwhile, the inside margin increased 120 bps to 40.6%.
Adjusted EBITDA increased 27.9% year over year to $222.9 million during the quarter under discussion.
Casey's witnessed an increase of 5% in operating expenses of $515.7 million. A one-time benefit of about $15 million from a legal matter resolution lowered operating expenses by roughly 3%. Excluding that one-time item, operating expenses rose approximately 8%. The metric increased for operating 41 more stores compared with the same period last year.
Performance by Categories
We note that Fuel sales increased 10.5% year over year to $2,157.2 million during the quarter. Fuel gallons sold jumped 3.7% to 644.9 million due to an increase in the store count.
Fuel gallons same-store sales were down 0.5% during the quarter under discussion compared with a 5.7% increase in the year-ago period. Fuel gross profit rose 10.4% to $262.6 million owing to higher fuel margin. We note that the fuel margin increased to 40.7 cents per gallon from 38.3 cents per gallon in the prior-year period.
Grocery & General Merchandise sales rose 8.6% to $795.7 million during the quarter due to solid sales of packaged beverages, snacks, and candy. Same-store sales increased 5.8% compared with 7.7% growth in the year-ago quarter. Grocery & General Merchandise margin increased to 34% from 32% in the year-ago period.
Prepared Food & Dispensed Beverage sales rose 7% to $313.5 million, driven by the increased sales of pizza slices and donuts. Same-store sales increased 5% compared with 7.4% in the year-ago quarter. Prepared Food & Dispensed Beverage margin contracted 70 bps to 57.3%.
Store Update
As of Jan 31, 2023, it operated 2,472 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 $413.2 million, long-term debt and finance lease obligations (net of current maturities) of $1,634.5 million and shareholders’ equity of $2,606.8 million. As of Jan 31, 2023, CASY had $876 million in available liquidity.
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
For fiscal 2023, Casey's now estimates fiscal 2023 same-store Inside sales to increase 6-7%, up from the prior view of 5-7%. The company envisions an Inside margin of about 40% and same-store fuel gallons to be down 1% to up 1%.
Casey's expects operating expenses to be near the low end of the annual range of about 9-10%. The company expects to invest roughly $450-$500 million in the fiscal year.
Shares of this Zacks Rank #3 (Hold) company have advanced 13.2% in the past year compared with the industry’s growth of 20.7%.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 2.5% and 6.2%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 9.8%, on average.
Arhaus, which operates as a lifestyle brand and premium retailer in the home furnishing market, carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 16.1%.
The Zacks Consensus Estimate for Arhaus’ current financial-year revenues and EPS suggests growth of 54% and 26.1%, respectively, from the year-ago reported figure. Arhaus has a trailing four-quarter earnings surprise of 112%, on average.
Ulta Beauty currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 13.8%.
The Zacks Consensus Estimate for Ulta Beauty’s current financial year sales suggests growth of 15.9% from the year-ago period. This beauty retailer and the premier beauty destination for cosmetics, fragrance, skincare products, hair care products and salon services has a trailing four-quarter earnings surprise of 26.2%, on average.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Casey's (CASY) Q3 Earnings Top, Inside Same-Store Sales Up 5.6%
Casey's General Stores, Inc. (CASY - Free Report) reported third-quarter fiscal 2023 results, wherein the top line missed the Zacks Consensus Estimate, while the bottom line beat the same. Impressively, both metrics improved from the year-ago period. Inside same-store sales also grew year over year. Results gained from prepared food and dispensed beverages, most notably pizza and donut sales, as well as strength in grocery and general merchandise in both alcoholic and non-alcoholic beverages.
A Closer Look at Results
Casey's, one of the leading convenience store chains in the United States, posted adjusted quarterly earnings of $2.36 per share, which beat the Zacks Consensus Estimate of $1.83 and increased from earnings of $1.71 reported in the prior-year period. Including a one-time benefit of approximately $15 million (or 31 cents a share) from the resolution of a legal matter, quarterly earnings came in at $2.67 per share.
The year-over-year jump in the bottom line can be attributed to higher profitability in fuel and inside the store. This was partly offset by an increase in operating expenses, driven primarily by operating 41 more stores than a year ago.
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
Total revenues of $3,332.6 million increased 9.3% year over year but missed the Zacks Consensus Estimate of $3,354 million. Revenues grew across all categories.
Inside sales jumped 8.2% to $1,109.2 million during the quarter. This increase was driven by the stellar performance in the grocery and general merchandise category, including non-alcoholic and alcoholic beverages, snacks and candy as well as pizza slices and donuts in the prepared food and dispensed beverage category.
Inside same-store sales increased 5.6% compared with a 7.6% rise registered in the year-ago period. The metric grew 13.6% on a two-year basis.
Margins & Expenses
The gross profit increased 11% year over year to $737.5 million due to higher revenues. The gross margin expanded 30 basis points (bps) to 22.1%. Inside gross profit grew 11.6% to $450.6 million. Meanwhile, the inside margin increased 120 bps to 40.6%.
Adjusted EBITDA increased 27.9% year over year to $222.9 million during the quarter under discussion.
Casey's witnessed an increase of 5% in operating expenses of $515.7 million. A one-time benefit of about $15 million from a legal matter resolution lowered operating expenses by roughly 3%. Excluding that one-time item, operating expenses rose approximately 8%. The metric increased for operating 41 more stores compared with the same period last year.
Performance by Categories
We note that Fuel sales increased 10.5% year over year to $2,157.2 million during the quarter. Fuel gallons sold jumped 3.7% to 644.9 million due to an increase in the store count.
Fuel gallons same-store sales were down 0.5% during the quarter under discussion compared with a 5.7% increase in the year-ago period. Fuel gross profit rose 10.4% to $262.6 million owing to higher fuel margin. We note that the fuel margin increased to 40.7 cents per gallon from 38.3 cents per gallon in the prior-year period.
Grocery & General Merchandise sales rose 8.6% to $795.7 million during the quarter due to solid sales of packaged beverages, snacks, and candy. Same-store sales increased 5.8% compared with 7.7% growth in the year-ago quarter. Grocery & General Merchandise margin increased to 34% from 32% in the year-ago period.
Prepared Food & Dispensed Beverage sales rose 7% to $313.5 million, driven by the increased sales of pizza slices and donuts. Same-store sales increased 5% compared with 7.4% in the year-ago quarter. Prepared Food & Dispensed Beverage margin contracted 70 bps to 57.3%.
Store Update
As of Jan 31, 2023, it operated 2,472 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 $413.2 million, long-term debt and finance lease obligations (net of current maturities) of $1,634.5 million and shareholders’ equity of $2,606.8 million. As of Jan 31, 2023, CASY had $876 million in available liquidity.
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
For fiscal 2023, Casey's now estimates fiscal 2023 same-store Inside sales to increase 6-7%, up from the prior view of 5-7%. The company envisions an Inside margin of about 40% and same-store fuel gallons to be down 1% to up 1%.
Casey's expects operating expenses to be near the low end of the annual range of about 9-10%. The company expects to invest roughly $450-$500 million in the fiscal year.
Shares of this Zacks Rank #3 (Hold) company have advanced 13.2% in the past year compared with the industry’s growth of 20.7%.
3 Picks You Can’t Miss Out On
Here we have highlighted three top-ranked stocks, namely Kroger (KR - Free Report) , Arhaus (ARHS - Free Report) and Ulta Beauty (ULTA - Free Report) .
Kroger, which operates as a supermarket operator, currently carries a Zacks Rank #2 (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 (Strong Buy) stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 2.5% and 6.2%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 9.8%, on average.
Arhaus, which operates as a lifestyle brand and premium retailer in the home furnishing market, carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 16.1%.
The Zacks Consensus Estimate for Arhaus’ current financial-year revenues and EPS suggests growth of 54% and 26.1%, respectively, from the year-ago reported figure. Arhaus has a trailing four-quarter earnings surprise of 112%, on average.
Ulta Beauty currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 13.8%.
The Zacks Consensus Estimate for Ulta Beauty’s current financial year sales suggests growth of 15.9% from the year-ago period. This beauty retailer and the premier beauty destination for cosmetics, fragrance, skincare products, hair care products and salon services has a trailing four-quarter earnings surprise of 26.2%, on average.