Casey’s General Stores CASY is set to report their fiscal 2020 first quarter results on Monday. The company has been on a solid run, up over 32% YTD, outpacing the S&P 500’s 2019 gains. Casey’s has been able to rise significantly because of its continued solid bottom line and revenue gains. Can the company keep up this growth in fiscal 2020? Let’s take a closer look at the convenience store giant, how they closed out fiscal 2019, and where they might be headed in 2020.
Overview and Q4 Performance
Casey’s General Stores was founded in 1959 and is based out of Ankeny, Iowa. The company operates a chain of convenience stores under the Casey’s and Casey’s General Store names in 16 Midwestern states, mainly Iowa, Missouri, and Illinois. The company offers a variety of products including freshly made food such as pizza, donuts, and sandwiches.
The company recently underwent its newest initiative called the Value Creation Plan. Their plan includes a new fleet card program, price and product optimization, digital engagements through mobile apps and online ordering, and capital reallocation. The company operates more than 2,000 stores and derives their revenue from three segments: Fuel, Grocery and Other Merchandise, and Prepared Food and Fountain.
In Q4, the company reported a 33.3% bottom-line jump to $0.68, beating our estimates by a whopping 61.9%. Casey’s generated $2.18 billion in revenue, jumping 4.3% year over year, beating our estimate by 2.15%. Net income rose 30.9% to $25.2 million. Fuel sales rose 1.9% to $1.36 billion and Grocery and Other Merchandise grew 9.9% to $562.7 million. Fuel same store sales fell 2.8% but Grocery and Other Merchandise same store sales hiked 5.7%. Prepared Food and Fountain sales spiked 5.4% to $254.1 million and its same store sales popped 2%.
The company expects Fuel same store sales in fiscal 2020 to be between -0.5% and 1% and for Grocery and Other Merchandise same store sales to gain between 2.5% and 4%. Additionally, they are projecting Prepared Food and Fountain same store sales to climb between 3% and 6%.
Our Q1 Consensus Estimates call for the company’s bottom-line to leap 7.89% to $2.05 per share and its top-line to gain 0.65% to $2.61 billion. Our Key Company Metric Estimates anticipate Fuel sales to slip 0.73% and for Grocery and Other Merchandise sales to climb 6.38% to $685.97 million. Prepared Food and Fountain sales are forecasted to increase 6.76% to $300 million. Looking ahead to their fiscal 2020 projections, earnings are predicted to grow by 7.44% to $5.92 per share and sales to climb 4.91% to $9.81 billion.
Casey’s General Stores is a company that has been growing steadily in 2019. Their strong year over year gains in both earnings and revenue have helped lift their stock in 2019. The company remains on track with their Value Creation Plan to improve sales and profitability, and has been increasing their dividend payout yearly for their shareholders. Furthermore, the company’s estimates have been revised upwards, earning the stock a Zacks Rank #1 (Strong Buy).
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