CASY
$130.20
Casey's General Stor
($1.47)
(1.12%)
Earnings Details
2nd Quarter October 2018
Monday, December 10, 2018 4:12:00 PM
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Summary

Casey's General Stor Beats

Casey's General Stor (CASY) reported 2nd Quarter October 2018 earnings of $1.80 per share on revenue of $2.5 billion. The consensus earnings estimate was $1.55 per share on revenue of $2.5 billion. The Earnings Whisper number was $1.71 per share. Revenue grew 17.8% 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
$1.80
Earnings Whisper
$1.71
Consensus Estimate
$1.55
Reported Revenue
$2.54 Bil
Revenue Estimate
$2.51 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Casey's Reports 41% Growth in Diluted Earnings Per Share in Second Quarter

ANKENY, Iowa--(BUSINESS WIRE)-- Casey’s General Stores, Inc. (“Casey’s” or the “Company”) (Nasdaq symbol CASY) today reported diluted earnings per share of $1.80 for the second quarter of fiscal 2019 ended October 31, 2018, compared to $1.28 per share for the same quarter a year ago. "We're moving the Company forward on multiple fronts," said Terry Handley, President and Chief Executive Officer. "The ongoing efforts around operating expense control, combined with a continued focus on strategic pricing, new store openings, and the favorable impact of tax reform produced strong diluted earnings per share growth."

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

  • Launched the Fleet Card program in late October
  • Continued emphasis on product optimization in fuel program
  • Finalized search for a Director of Fuel Procurement
  • Piloting the fuel price optimization software October through December
  • Optimized merchandise promotions to improve inside margins
  • Onboarded both a Vice President of Digital Customer Experience and a Director of Digital Marketing

Fuel - For the quarter, same-store gallons sold were down 1.1% with an average margin of 20.0 cents per gallon. "With the expanded resources in our fuel team, we have become more proactive at managing retail fuel pricing," said Handley. "Gross profit dollar growth was strong despite same-store gallon movement being under our annual guidance range for the second quarter, due mainly to softer consumer demand. We remain excited about this category moving forward, with product and price optimization, procurement opportunities, and the fleet card program expected to drive future benefits." Total gallons sold for the quarter were up 5.7% to 593.8 million gallons while gross profit dollars increased 7.2% to $118.7 million. Year to date, same-store gallons sold were down 0.3% with an average margin of 20.3 cents per gallon. Year to date, gross profit dollars increased 10.1% to $242.1 million.

Grocery and Other Merchandise - For the quarter, same-store sales were up 2.7% with an average margin of 32.4%. "The grocery and other merchandise category continues to perform well," said Handley. "For the second straight quarter, we realized stronger margins at the high end of our guidance range, which drove gross profit dollar growth. The packaged beverage and other tobacco subcategories led the way in contributing to that growth." For the second quarter, total grocery and other merchandise revenue increased 8.1% to $618.3 million, and gross profit dollars were up 9.3% to $200.2 million. Total revenue for the first six months was up 8.0% to $1.3 billion. Same-store sales year to date were up 2.9% with an average margin of 32.4%.

Prepared Food and Fountain - Same-store sales for the quarter were up 2.2% with an average margin of 62.4%. "Strategic price increases helped expand margin in the quarter in a competitive environment," said Handley. "Our breakfast daypart continues to be a strong contributor to overall results." Total prepared food and fountain revenue increased 8.0% to $283.1 million in the second quarter while gross profit dollars grew 10.1% to $176.7 million. For the first six months, total revenue increased 7.7% to $564.1 million. Year to date, same-store sales were up 2.0% with an average margin of 62.2%.

Operating Expenses - For the second quarter, total operating expenses increased 6.6% to $344.2 million. Year to date, operating expenses are up 9.2%. Same-store operating expenses excluding credit card fees were down 0.1% for the quarter. The increase in total operating expenses was primarily attributable to operating 94 more stores than the same quarter in the prior year. "Our second quarter results demonstrated our commitment to effectively controlling operating expenses," noted Handley. "Despite higher credit card fees and fleet fuel expenses, our team was able to continue to drive same-store operating expenses down in the second quarter as compared to prior year. The largest contributor to that success was the continued efforts around managing the hours worked at our stores."

Expansion - The following table represents the roll forward of store growth through the second quarter of fiscal 2019:

        Store Count
Stores at 4/30/18 2,073
New Store Construction 25
Acquisitions 3
Acquisitions not opened (2)

Prior Acquisitions opened

4

Closed

(6)
Stores at 10/31/18 2,097
 

The Company had 23 acquisition stores under agreement to purchase and a land bank of 95 sites (in addition to 36 that were under construction) as of October 31, 2018. "We are pleased with our current growth opportunities," said Handley. "We remain encouraged with the acquisition environment and will continue to be a disciplined buyer. Combining acquisitions with our organic growth pipeline gives us the agility to pull multiple levers to drive further expansion."

Share Repurchase Program - The Company has $300 million remaining on its authorization from March 2018. There were no repurchases made against that authorization in the second quarter.

Dividend - At its December meeting, the Board of Directors declared a quarterly dividend of $0.29 per share. The dividend is payable February 15, 2019 to shareholders of record on February 1, 2019.

Fiscal 2019 Guidance - Below is a summary of the current fiscal 2019 guidance:

  Same-store Sales   Margin
Previous   Current Previous   Current
Fuel (Gallons and CPG) 1.5 - 3.0% (1.0%) - 0.5% 18.5 - 20.5 19.0 - 21.0
Grocery and Other Merchandise 1.5 - 3.0% 1.5 - 3.0% 31.5 - 32.5% 31.5 - 32.5%
Prepared Food and Fountain 1.5 - 3.5% 1.5 - 3.5% 60.0 - 62.0% 60.0 - 62.0%
 
Previous Current
Operating Expenses 8.5 - 10.5% 8.5 - 10.5%
Depreciation and Amortization 14.0 - 16.0% 13.0 - 15.0%
New Store Construction 60 stores 60 stores
Acquisitions 20+ stores 20+ stores
 

Casey’s General Stores, Inc.

Condensed Consolidated

Statements of Income

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

   
Three Months Ended Six Months Ended
October 31, October 31,
2018   2017 2018   2017
Total revenue $ 2,538,005 $ 2,153,745 $ 5,126,437 $ 4,247,484
Cost of goods sold (exclusive of depreciation and amortization, shown separately below) 2,027,684 1,686,088 4,094,348 3,303,130
Operating expenses 344,186 322,949 703,578 644,196
Depreciation and amortization 61,356 54,157 120,196 106,526
Interest, net   14,191     12,976     28,597     24,351
Income before income taxes 90,588 77,575 179,718 169,281
Federal and state income taxes   23,973     28,657     42,879     63,605
Net income $ 66,615   $ 48,918   $ 136,839   $ 105,676
Net income per common share
Basic $ 1.82   $ 1.29   $ 3.73   $ 2.77
Diluted $ 1.80   $ 1.28   $ 3.70   $ 2.75
Basic weighted average shares 36,698,528 37,804,649 36,683,450 38,108,105
Plus effect of stock compensation   318,943     378,950     314,181     379,802
Diluted weighted average shares   37,017,471     38,183,599     36,997,631     38,487,907
 

Casey’s General Stores, Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

   
October 31, 2018 April 30, 2018
Assets
Current assets
Cash and cash equivalents $ 51,887 $ 53,679
Receivables 46,875 45,045
Inventories 258,644 241,668
Prepaid expenses 7,923 5,766
Income tax receivable 16,849   50,682
Total current assets 382,178   396,840
Other assets, net of amortization 39,813 29,909
Goodwill 140,623 140,258
Property and equipment, net of accumulated depreciation of $1,715,433 at October 31, 2018 and $1,611,177 at April 30, 2018 2,983,043   2,902,920
Total assets $ 3,545,657   $ 3,469,927
Liabilities and Shareholders’ Equity
Current liabilities
Notes payable to bank $ $ 39,600
Current maturities of long-term debt 15,384 15,374
Accounts payable 324,806 321,419
Accrued expenses 130,786   131,457
Total current liabilities 470,976   507,850
Long-term debt, net of current maturities 1,283,992 1,291,725
Deferred income taxes 374,665 341,946
Deferred compensation 15,584 15,928
Insurance accruals, net of current portion 20,155 19,748
Other long-term liabilities 23,206   21,589
Total liabilities 2,188,578   2,198,786
Total shareholders’ equity 1,357,079   1,271,141
Total liabilities and shareholders’ equity $ 3,545,657   $ 3,469,927
 

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, including our ability to execute our value creation plan or to realize benefits therefrom. 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)
    Grocery &   Prepared    
Other Food
Three months ended 10/31/2018 Fuel Merchandise & Fountain Other Total
Revenue $ 1,621,868 $ 618,250 $ 283,062 $ 14,825 $ 2,538,005
Revenue less cost of goods sold (exclusive of depreciation and amortization) $ 118,656 $ 200,193 $ 176,675 $ 14,797 $ 510,321
7.3 % 32.4 % 62.4 % 99.8 % 20.1 %
Fuel gallons 593,750
Three months ended 10/31/2017
Revenue $ 1,306,246 $ 572,151 $ 261,998 $ 13,350 $ 2,153,745
Revenue less cost of goods sold (exclusive of depreciation and amortization) $ 110,686 $ 183,133 $ 160,510 $ 13,328 $ 467,657
8.5 % 32.0 % 61.3 % 99.8 % 21.7 %
Fuel gallons 561,692
 
Summary by Category (Amounts in thousands)
Grocery & Prepared
Other Food
Six months ended 10/31/2018 Fuel Merchandise & Fountain Other Total
Revenue $ 3,269,285 $ 1,263,050 $ 564,065 $ 30,037 $ 5,126,437
Revenue less cost of goods sold (exclusive of depreciation and amortization) $ 242,132 $ 409,119 $ 350,859 $ 29,979 $ 1,032,089
7.4 % 32.4 % 62.2 % 99.8 % 20.1 %
Fuel gallons 1,195,545
Six months ended 10/31/2017
Revenue $ 2,527,231 $ 1,169,565 $ 523,838 $ 26,850 $ 4,247,484
Revenue less cost of goods sold (exclusive of depreciation and amortization) $ 219,898 $ 373,497 $ 324,155 $ 26,804 $ 944,354
8.7 % 31.9 % 61.9 % 99.8 % 22.2 %
Fuel gallons 1,126,739
 
Fuel Gallons       Fuel Margin
Same-store Sales (Cents per gallon, excluding credit card fees)
  Q1   Q2   Q3   Q4  

Fiscal
Year

  Q1   Q2   Q3   Q4  

Fiscal
Year

F2019 0.5 % (1.1 )% F2019 20.5 ¢ 20.0 ¢
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
 
Grocery & Other Merchandise Grocery & Other Merchandise
Same-store Sales Margin
Q1 Q2 Q3 Q4

Fiscal
Year

Q1 Q2 Q3 Q4

Fiscal
Year

F2019 3.2 % 2.7 % F2019 32.4 % 32.4 %
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
 
Prepared Food & Fountain Prepared Food & Fountain
Same-store Sales Margin
Q1 Q2 Q3 Q4

Fiscal
Year

Q1 Q2 Q3 Q4

Fiscal
Year

F2019 1.7 % 2.2 % F2019 62.0 % 62.4 %
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
 

Corporate information is available at this Web site: http://www.caseys.com. Earnings will be reported during a conference call on December 11, 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 Web site 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 Web site at https://www.caseys.com/investor-relations/press-releases-and-webcasts until December 11, 2022.

Bill Walljasper
(515) 965-6505

Source: Casey’s General Stores, Inc.