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Factors You Need to Know Ahead of Casey's (CASY) Q1 Earnings

Zacks Equity Research

Casey's General Stores, Inc. CASY is likely to register improvement in the bottom line when it reports first-quarter fiscal 2020 numbers. Notably, this operator of convenience stores had reported solid earnings and comfortably surpassed the Zacks Consensus Estimate in the preceding four quarters.

In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by average of 30.3%. In the last reported quarter, the company delivered positive earnings surprise of 61.9%.

In the to-be-reported quarter, the Zacks Consensus Estimate for earnings is currently pegged at $1.99, suggesting an improvement of 4.7% from the year-ago quarter’s reported figure. We note that the Zacks Consensus Estimate has remained unchanged in the past 30 days. The Zacks Consensus Estimate for revenues is pegged at $2,608 million, indicating an improvement of about 0.8% from the year-ago period. We note that the top and the bottom line had increased 4.3% and 33.3%, respectively, in the last reported quarter.

Factors Likely to Drive Results

Casey's remains on track with its value creation plan to improve sales. This includes new fleet card program, price and product optimization, loyalty program, digital engagements comprising mobile app and online ordering capabilities, cost containment efforts and capital reallocation plan.

However, the company is grappling with soft fuel gallons same-store sales. Fuel gallons same-store sales decreased 2.8% during the fourth quarter of fiscal 2019 against growth of 2% witnessed in the year-ago quarter. The company witnessed fuel gallons same-store sales decline of 3.4% in the third quarter.

We also remain concerned about higher operating expenses, which rose 9.6% during the fourth quarter of fiscal 2019. This follows an increase of 5.7% during the preceding quarter. Certainly, any increase in operating expenses may weigh on margins. Further, any rise in wholesale fuel costs and higher input costs remain concerns.

Caseys General Stores, Inc. Price, Consensus and EPS Surprise


Caseys General Stores, Inc. Price, Consensus and EPS Surprise

Caseys General Stores, Inc. price-consensus-eps-surprise-chart | Caseys General Stores, Inc. Quote

What our Model Says?

Our proven model does not show that Casey's is likely to beat estimates this quarter. A stock needs to have — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) as well as a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Though Casey's has a Zacks Rank #1, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may consider as our model shows that these have the right combination of elements to post earnings beat.

Zumiez ZUMZ has an Earnings ESP of +12.50% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

General Mills GIS has an Earnings ESP of +0.37% and a Zacks Rank #2.

Costco COST has an Earnings ESP of +0.62% and a Zacks Rank #3.

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