Casey's General Stores Inc (CASY) Reports Solid Q2 Earnings with 16% EPS Increase

• Diluted EPS climbed to $4.24, marking a 16% increase year-over-year.

• Inside same-store sales rose by 2.9%, with a notable 41.1% inside margin.

• Casey's General Stores Inc (NASDAQ:CASY) expands its footprint with 59 new or acquired stores, including a 22-store acquisition in Texas.

• The company announces a quarterly dividend of $0.43 per share, payable in February 2024.

On December 11, 2023, Casey's General Stores Inc (NASDAQ:CASY) released its 8-K filing, announcing financial results for the second quarter ended October 31, 2023. The company reported a robust performance with a 16% increase in diluted earnings per share (EPS) to $4.24 and a 15% rise in net income to $159 million. Earnings before interest, taxes, depreciation, and amortization (EBITDA) also saw a healthy 13% increase to $306 million compared to the same period last year.

Financial Performance Highlights

Casey's General Stores Inc (NASDAQ:CASY) experienced growth in both inside same-store sales and fuel gross profit. Inside same-store sales, which include grocery and general merchandise as well as prepared food and dispensed beverages, increased by 2.9% over the prior year. This was complemented by an 11.0% increase on a two-year stack basis. The inside margin improved to 41.1%, contributing to a 9.7% increase in total inside gross profit, which reached $553.3 million.

The fuel segment remained stable with same-store fuel gallons sold flat compared to the prior year, but the fuel margin increased to 42.3 cents per gallon. This led to an 8.6% increase in total fuel gross profit, amounting to $308.8 million. Operating expenses, excluding credit card fees, rose by 2.1%, with the company achieving a 2% reduction in same-store labor hours.

Operational and Strategic Developments

Casey's General Stores Inc (NASDAQ:CASY) continued its expansion strategy, building or acquiring 59 stores during the quarter, including a significant move into Texas with a 22-store acquisition. As of October 31, 2023, the company operated 2,592 stores. In terms of liquidity, Casey's reported approximately $1.3 billion in available liquidity, consisting of cash on hand and available borrowing capacity.

The company also returned value to shareholders through a share repurchase program, buying back approximately $30 million of shares, with $340 million remaining under the current authorization. Additionally, the Board of Directors approved a quarterly dividend of $0.43 per share, reinforcing the company's commitment to shareholder returns.

Outlook and Forward Guidance

Casey's General Stores Inc (NASDAQ:CASY) provided an optimistic outlook for fiscal 2024, expecting EBITDA growth to align with the strategic plan's goal of 8% to 10%. The company plans to repurchase at least $100 million in shares throughout the fiscal year and anticipates a 3.5% to 5% increase in same-store inside sales. Operating expenses are projected to rise by approximately 6% to 8%, while same-store operating expenses, excluding credit card fees, are expected to increase by about 3%.

Casey's General Stores Inc (NASDAQ:CASY) is poised for continued growth and profitability, as evidenced by its strong second-quarter performance and strategic expansion efforts. The company's focus on inside sales and fuel gross profit, combined with effective cost management and shareholder-friendly initiatives, positions it well for future success.

Explore the complete 8-K earnings release (here) from Casey's General Stores Inc for further details.

This article first appeared on GuruFocus.