Casey's General Stores, Inc. (CASY Quick QuoteCASY - Free Report) 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. We had expected inside same-store sales to grow 4.3%.

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.

This Zacks Rank #3 (Hold) company witnessed a rise of 8.7% in operating expenses of $609.5 million. We had estimated a 10.2% increase in operating expenses.

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Update on Casey's Performance of Categories

Prepared Food & Dispensed Beverage sales rose 8.7% year over year to $405.1 million, missing our growth estimate of 11.8%. 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, lagging our projected growth rate of 9.4%. 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. We had anticipated an increase of 6.3% in fuel gallons sold.

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.

Shares of Casey's have advanced 17.8% in the past six months, in line with the industry.

Picks You Can’t Miss Out On

We have highlighted three better-ranked stocks, namely Sprouts Farmers Market, Inc. (SFM Quick QuoteSFM - Free Report) , Ollie's Bargain Outlet (OLLI Quick QuoteOLLI - Free Report) and International Flavors & Fragrances (IFF Quick QuoteIFF - Free Report) .

Sprouts Farmers Market operates in a highly fragmented grocery store industry and currently flaunts a Zacks Rank #1 (Strong Buy). SFM has a trailing four-quarter earnings surprise of 12%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Sprouts Farmers Market’s current financial-year sales and earnings implies growth of 9.6% and 18.7%, respectively, from the year-ago reported numbers.

Ollie's Bargain Outlet, a value retailer of brand-name merchandise at drastically reduced prices, has a Zacks Rank #2 (Buy) at present. 

OLLI has a trailing four-quarter earnings surprise of 7.9%, on average. 

International Flavors & Fragrances is a global leader in high-value ingredients and solutions for food and beverage, home and personal care, and health & wellness markets. It has a Zacks Rank of 2 at present. 

The Zacks Consensus Estimate for current financial-year earnings indicates growth of 26.4% from the year-ago reported figure. IFF has a trailing four-quarter average earnings surprise of 15.6%.