CASY
$116.23
Casey's General Stor
$1.48
1.29%
Earnings Details
4th Quarter April 2018
Tuesday, June 12, 2018 8:41:00 AM
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Summary

Casey's General Stor Misses

Casey's General Stor (CASY) reported 4th Quarter April 2018 earnings of $0.51 per share on revenue of $2.1 billion. The consensus earnings estimate was $0.68 per share on revenue of $2.1 billion. The Earnings Whisper number was $0.63 per share. Revenue grew 13.1% on a year-over-year basis.

Casey' General Stores Inc, together with its subsidiaries, operates convenience stores under the Caseys General Store name in 14 Midwestern states. Its stores offers a selection of food, beverage, and tobacco products, as well as other nonfood items.

Results
Reported Earnings
$0.51
Earnings Whisper
$0.63
Consensus Estimate
$0.68
Reported Revenue
$2.09 Bil
Revenue Estimate
$2.14 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Casey’s Reports Fiscal 2018 Earnings and Provides Value Creation Plan Update

ANKENY, Iowa--(BUSINESS WIRE)-- Casey’s General Stores, Inc. (Nasdaq symbol CASY) today reported diluted earnings per share of $8.34 (inclusive of the one-time impact of $4.53 per share related to the adoption of the Tax Cuts and Jobs Act) for the year ended April 30, 2018 compared to $4.48 for the same period last year. For the fourth quarter of fiscal 2018, diluted earnings per share were $0.51 versus $0.76 for the same period a year ago. "A suppressed fuel margin and challenging weather had an adverse impact on fourth quarter results, however we believe we are taking market share in most categories. The 53 new stores we opened in the fourth quarter, combined with increased promotional activity and normalized weather throughout our region has us off to an encouraging start to fiscal 2019," said Terry Handley, President and CEO.

Value Creation Plan Update - The Company has completed or made progress on the following value creation plan activities:

  • Hired a Chief Marketing Officer
  • Completed the initial $300 million share repurchase authorization
  • Increased quarterly dividend 12%, which represents the 18th straight year of increase
  • Finalized a contract with a partner for our fleet card program
  • Enhancing fuel margin through product optimization
  • Identified platforms for fuel and inside price optimization
  • Completed startup and design phase of digital transformation
  • Streamlined current mobile app and online ordering capabilities
  • Generating store level profit improvements from strategic reductions of 24-hour and pizza delivery locations

Fuel - For the year, same-store gallons sold were up 2.3% with an average margin of 18.5 cents per gallon. For the quarter, same-store gallons increased 2.0% with an average margin of 16.3 cents per gallon. "Same-store gallons sold remained strong in the fourth quarter, outpacing miles driven trends in our region signaling an increase in our market share," stated Handley. "However, a rising wholesale cost environment in the fourth quarter resulted in the lowest quarterly fuel margin since fiscal 2014." For fiscal 2018, total gallons sold were up 6.6% to 2.2 billion. Gross profit dollars for the year were up 7.5% to $406.8 million, primarily due to an increase in gallons sold.

Grocery and Other Merchandise - For the year, same-store sales were up 1.9% with an average margin of 31.8%. For the fourth quarter, same-store sales were down 0.4% with an average margin of 31.2%. "The combination of weather and a management decision to reduce 24 hour locations unfavorably impacted the quarterly same-store sales in the fourth quarter," said Handley. "Even with these factors in play, industry data shows that we continue to gain market share in this category." For the year, total sales were up 4.6% to $2.2 billion and gross profit dollars increased 5.5% to $693.6 million.

Prepared Food and Fountain - For the year, same-store sales were up 1.7% with an average margin of 61.0%. For the fourth quarter, same-store sales were down 1.3% with an average margin of 59.7%. "We strategically reduced the number of pizza delivery nights across our chain in the fourth quarter," stated Handley. "The combination of weather, and the 24-hour and pizza delivery adjustments negatively impacted same-store sales. However, the decrease in overall hours at these stores positively impacted store level profits through the reduction in operating expense." For fiscal 2018, total sales increased 5.5% to $1.0 billion, and gross profit dollars rose 3.3% to $613.7 million.

Operating Expenses - For the fiscal year, operating expenses increased 9.4% to $1.3 billion. For the fourth quarter, operating expenses were up 7.9% from the same time period a year ago. Fourth quarter operating expenses were impacted by the following items:

  • Health insurance expense increased $4.5 million, primarily due to an increase in the number and severity of claims.
  • Credit card fees and fuel expense combined increased $4.4 million, primarily due to a 12.1% increase in retail fuel prices.
  • The Company incurred $1.6 million in consulting fees related to the execution of the value creation plan.
  • Snow removal costs increased $1.2 million, due to inclement weather.

Remaining operating expenses were up 4.7%, primarily due to an increase in the number of stores in operation from the same time period a year ago.

Expansion - For the fiscal year, the Company built and opened 85 new stores, acquired 26 stores, completed 30 replacements, and remodeled 74 stores. As of April 30, 2018, there were 31 new stores, four replacement stores, and three major remodel stores under construction. "We are excited to have opened our first store in the state of Michigan in April," stated Handley. "We're also encouraged by the number of conversations we're having on potential acquisitions. Currently, we have 11 acquisition stores under agreement to purchase, and are actively pursuing additional acquisition opportunities in a disciplined manner."

Share Repurchase Program - From its inception on March 9, 2017, through the end of the fourth quarter of fiscal 2018, the Company repurchased 2,441,600 shares of its common stock under its open market share repurchase program for approximately $264.8 million, or an average price of $108.46 per share. As of April 30, 2018, the Company had a total remaining authorized amount for share repurchases of $35.2 million on its initial $300 million authorization, which was completed in May 2018. In addition, in March 2018, the Board of Directors authorized a new $300 million share repurchase program through fiscal year 2020.

Fiscal 2019 Guidance - The corporate performance guidance for fiscal 2019 is as follows:

Same-store Sales   Average Margin
Fuel (Gallons and CPG)   1.5 - 3.0%   18.5 - 20.5
Grocery and Other Merchandise 1.5 - 3.0% 31.5 - 32.5%
Prepared Food and Fountain 1.5 - 3.5% 60.0 - 62.0%
 
Other Guidance
Operating Expenses (including expenses from value creation plan) 8.5% - 10.5%
Depreciation and Amortization 14.0 - 16.0%
New Store Construction 60 stores
Acquisitions 20+ stores
 

Dividend - For the last 18 years, the Company has increased its annual dividend to shareholders. At its June meeting, the Board of Directors increased the quarterly dividend from $.26 to $.29 per share. The dividend is payable August 15th to shareholders of record on August 1st, 2018.

   

Casey’s General Stores, Inc.

Condensed Consolidated

Statements of Income

(Dollars in thousands, except share and per share amounts) (Unaudited)

 
Three Months Ended April 30, Twelve Months Ended April 30,
2018   2017 2018   2017
Total revenue $ 2,089,037 1,846,460 $ 8,391,124 7,506,587
Cost of goods sold (exclusive of depreciation and amortization, shown separately below) 1,683,922 1,448,241 6,621,731 5,825,426
Operating expenses 315,809 292,590 1,283,046 1,172,328
Depreciation and amortization 57,402 51,947 220,970 197,629
Interest, net 13,119   10,362   50,940   41,536
Income before income taxes 18,785 43,320 214,437 269,668
Federal and state income taxes (477 ) 13,242   (103,466 ) 92,183
Net income $ 19,262   30,078   $ 317,903   177,485
Net income per common share
Basic $ 0.52   0.77   $ 8.41   4.54
Diluted $ 0.51   0.76   $ 8.34   4.48
Basic weighted average shares 37,298,281 38,985,738 37,778,304 39,124,665
Plus effect of stock compensation 353,010   450,073   353,795   454,333
Diluted weighted average shares 37,651,291   39,435,811   38,132,099   39,578,998
   

Casey’s General Stores, Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 
April 30, 2018 April 30, 2017
Assets
Current assets
Cash and cash equivalents $ 53,679 $ 76,717

Receivables

45,045 43,244
Inventories 241,668 201,644
Prepaid expenses 5,766 9,179
Income tax receivable 43,776   19,901
Total current assets 389,934   350,685
Other assets, net of amortization 29,909 23,453
Goodwill 140,258 132,806
Property and equipment, net of accumulated depreciation 2,902,920   2,513,158
Total assets $ 3,463,021   $ 3,020,102
Liabilities and Shareholders’ Equity
Current liabilities
Notes payable to bank $ 39,600 $ 900
Current maturities of long-term debt 15,374 15,421
Accounts payable 321,419 293,903
Accrued expenses 151,205   136,322
Total current liabilities 527,598   446,546
Long-term debt, net of current maturities 1,291,725 907,356
Deferred income taxes 335,040 440,124
Deferred compensation 15,928 15,784
Other long-term liabilities 21,589   19,672
Total liabilities 2,191,880   1,829,482
Total shareholders’ equity 1,271,141   1,190,620
Total liabilities and shareholders’ equity $ 3,463,021   $ 3,020,102
 

Certain statements in this news release, including any discussion of management expectations for future periods, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from future results expressed or implied by those statements. Casey’s disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.

 
Summary by Category (Amounts in thousands)
Three months ended 4/30/2018   Fuel  

Grocery & Other
Merchandise

 

Prepared Food
& Fountain

  Other   Total
Revenue $ 1,321,417 $ 511,834 $ 241,163 $ 14,623 $ 2,089,037
Revenue less cost of goods sold (exclusive of depreciation and amortization) $ 86,640 $ 159,929 $ 143,949 $ 14,597 $ 405,115
Margin 6.6 % 31.2 % 59.7 % 99.8 % 19.4 %
Fuel gallons 532,196
Three months ended 4/30/2017
Revenue $ 1,099,743 $ 500,068 $ 233,150 $ 13,499 $ 1,846,460
Gross profit $ 85,592 $ 155,374 $ 143,774 $ 13,479 $ 398,219
Margin 7.8 % 31.1 % 61.7 % 99.9 % 21.6 %
Fuel gallons 496,492
 
Summary by Category (Amounts in thousands)
Twelve months ended 4/30/2018 Fuel

Grocery & Other
Merchandise

Prepared Food
& Fountain

Other Total
Revenue $ 5,145,988 $ 2,184,147 $ 1,005,621 $ 55,368 $ 8,391,124
Revenue less cost of goods sold (exclusive of depreciation and amortization) $ 406,811 $ 693,576 $ 613,736 $ 55,270 $ 1,769,393
Margin 7.9 % 31.8 % 61.0 % 99.8 % 21.1 %
Fuel gallons 2,198,600
Twelve months ended 4/30/2017
Revenue $ 4,414,128 $ 2,087,349 $ 953,430 $ 51,680 $ 7,506,587
Gross profit $ 378,347 $ 657,190 $ 594,024 $ 51,600 $ 1,681,161
Margin 8.6 % 31.5 % 62.3 % 99.8 % 22.4 %
Fuel gallons 2,061,794
 
Fuel Gallons   Fuel Margin
Same-store Sales Growth (Cents per gallon, excluding credit card fees)
  Q1   Q2   Q3   Q4  

Fiscal
Year

  Q1   Q2   Q3   Q4  

Fiscal
Year

F2018 1.7 % 1.9 % 3.8 % 2.0 % 2.3 % F2018 19.3 ¢ 19.7 ¢ 18.6 ¢ 16.3 ¢ 18.5

¢

F2017 3.1 3.7 2.6 (0.5 ) 2.1 F2017 19.5 18.6 17.9 17.2 18.4
F2016 3.4 3.3 1.6 4.6 3.0 F2016 17.5 24.7 18.1 17.8 19.6
 
 

Grocery & Other Merchandise

Grocery & Other Merchandise

Same-store Sales Growth Margin
Q1 Q2 Q3 Q4

Fiscal
Year

Q1 Q2 Q3 Q4

Fiscal
Year

F2018 3.1 % 2.5 % 2.5 % (0.4 )% 1.9 % F2018 31.9 % 32.0 % 31.9 % 31.2 % 31.8 %
F2017 4.7 3.1 3.0 1.5 2.9 F2017 31.6 32.0 31.1 31.1 31.5
F2016 7.0 7.5 7.1 7.4 7.1 F2016 32.6 31.5 31.2 32.1 31.9
 
Prepared Food & Fountain Prepared Food & Fountain
Same-store Sales Growth Margin
Q1 Q2 Q3 Q4

Fiscal
Year

Q1 Q2 Q3 Q4

Fiscal
Year

F2018 3.7 % 2.1 % 1.7 % (1.3 )% 1.7 % F2018 62.5 % 61.3 % 60.5 % 59.7 % 61.0 %
F2017 5.1 5.1 5.8 3.2 4.8 F2017 62.8 62.9 61.7 61.7 62.3
F2016 10.3 9.4 6.0 8.2 8.4 F2016 62.5 63.4 62.0 61.9 62.5
 

Corporate information is available at this website: https://www.caseys.com. Earnings will be reported during a conference call on June 12, 2018. The call will be broadcast live over the Internet at 9:30 a.m. CST. To access the call, go to the Press Releases and Webcasts section of our website at https://www.caseys.com/investor-relations/press-releases-and-webcasts. No access code is required. A webcast replay of the call will remain available in an archived format on the Press Releases and Webcasts section of our website at https://www.caseys.com/investor-relations/press-releases-and-webcasts until June 12, 2022.

Casey’s General Stores, Inc.
Bill Walljasper, (515) 965-6505

Source: Casey’s General Stores, Inc.