Casey’s General Stores, Inc. (“Casey’s” or the “Company”)
(Nasdaq symbol CASY) today reported diluted earnings per share of
$1.90 for the first quarter of fiscal 2019 ended July 31,
2018, compared to $1.46 per share for the same quarter a year ago.
"The combination of recent investments made in expanding our store
count, a more proactive strategic pricing approach in all areas of
the business, continued focus on reducing labor hours inside the
stores, the favorable impacts of tax reform, and share repurchases
contributed to strong diluted earnings per share growth," said
Terry Handley, President and Chief Executive Officer. "We continue
to invest in the Value Creation Plan that we believe will drive
long-term shareholder value, and we remain on track to begin
realizing benefits in the second half of fiscal 2019."
Value Creation Plan Update - The Company has completed or
made progress on the following value creation plan activities:
- Finalizing marketing plan with our
fleet card vendor to launch in fiscal 2nd quarter
- Continued focus on product optimization
in fuel program
- Conducting a search for a Vice
President of Digital and a Fuel Procurement Manager
- Finalized contracts with separate
vendors for fuel and inside price optimization
- On schedule to begin pilot program in
fuel price optimization in fiscal 2nd quarter
- Finalized several contracts as part of
our E-commerce and customer facing platforms
Fuel - For the quarter, same-store gallons sold were up
0.5% with an average margin of 20.5 cents per gallon. "As we build
our fuel team, we have been more proactively managing retail fuel
pricing," said Handley. "We believe this drove a more timely
response to changes in market conditions, which helped realize a
stronger quarterly fuel margin. This approach, combined with rising
retail fuel prices, led to an overall softer demand for fuel. While
same-store gallon movement was under our annual guidance range, we
continued to outpace our peers in same-store gallons, and overall
we are very pleased with the gross profit dollar growth." Total
gallons sold for the quarter were up 6.5% to 601.8 million gallons
while gross profit dollars increased 13.1% to $123.5 million.
Grocery and Other Merchandise - For the quarter,
same-store sales were up 3.2% with an average margin of 32.4%. "We
are pleased about the overall direction of our grocery and other
merchandise category," said Handley. "Our focus continues to be on
managing the promotional environment to drive profitable growth.
Some of our faster growing and higher margin product lines, such as
packaged beverages, produced strong quarterly results, particularly
in May." For the first quarter, total grocery and other merchandise
revenue increased 7.9% to $644.8 million, and gross profit dollars
were up nearly 10% to $208.9 million.
Prepared Food and Fountain - Same-store sales for the
quarter were up 1.7% with an average margin of 62.0%. "Our prepared
food category showed significant improvement from fourth quarter
and moderate growth overall, including particularly strong results
in the breakfast daypart." said Handley. "These results helped
offset some softness in our bakery category. Overall, our increased
investment in pizza promotions did not significantly affect our
margin. Combining those promotions with other pricing strategies
produced a margin at the top end of our guidance for the quarter."
Total prepared food and fountain revenue increased 7.3% to $281.0
million in the first quarter while gross profit dollars grew 6.4%
to $174.2 million.
Operating Expenses - For the first quarter, total
operating expenses increased 11.9% to $359.4 million. Same-store
operating expenses excluding credit card fees were up 1.6% for the
quarter. The increase in total operating expenses was primarily
attributable to operating 105 more stores than the same quarter in
the prior year. The Company incurred increases of approximately $8
million in credit card fees and fleet fuel expense, and $3.6
million in health care costs. "The focus on reducing hours worked
in our stores and changes to 24-hour and pizza delivery locations
allowed us to manage store level operating expenses effectively,"
added Handley. "However, we were challenged by higher fuel prices,
which caused a significant increase in credit card fees and fleet
fuel expenses compared to the same quarter last year."
Expansion - The following table represents the roll
forward of store growth in the first quarter of fiscal 2019:
Store Count Stores at
4/30/18 2,073
New Store Construction 15
Acquisitions 1
Acquisitions not opened (1)
Prior
Acquisitions opened 1
Closed (4)
Stores at
7/31/18 2,085
The Company had 14 acquisition stores under agreement to
purchase and a land bank of 103 sites as of July 31, 2018.
"The increased focus in store development over the last couple of
years has allowed us to build a bank of land sites for future
growth," said Handley. "It will allow us to have a more controlled
and uniform rollout of our new stores each quarter. We also
continue to be encouraged by the number of conversations we are
having with potential sellers."
Share Repurchase Program - During the first quarter of
fiscal 2019, the Company finished its repurchase on the initial
$300 million repurchase program authorized in March 2017,
repurchasing 352,592 shares for approximately $35.2 million, or an
average price of $99.97 per share. The Company also has a second
$300 million authorization that was approved by the Board in March
2018. There were no repurchases made against that authorization in
the first quarter. "We felt it was appropriate to reallocate
capital in the near term to support and expedite our value creation
plan as we get closer to launching those programs," said
Handley.
Dividend - At its September meeting, the Board of
Directors declared a quarterly dividend of $0.29 per share. The
dividend is payable November 15, 2018 to shareholders of record on
November 1, 2018.
Fiscal 2019 Guidance -Below is a summary of the current
fiscal 2019 guidance:
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% Operating Expenses 8.5- 10.5%
Depreciation and Amortization 14.0 - 16.0% New Store Construction
60 stores Acquisitions 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 July 31,
2018 2017 Total
revenue
$ 2,588,432 $ 2,093,739 Cost of goods sold
(exclusive of depreciation and amortization, shown separately
below)
2,066,664 1,617,042 Operating expenses
359,392
321,247 Depreciation and amortization
58,840 52,369
Interest, net
14,406 11,375 Income before income taxes
89,130 91,706 Federal and state income taxes
18,906
34,948 Net income
$ 70,224 $ 56,758 Net income per
common share Basic
$ 1.92 $ 1.48 Diluted
$
1.90 $ 1.46 Basic weighted average shares
36,669,021
38,360,104 Plus effect of stock compensation
311,387 480,184
Diluted weighted average shares
36,980,408 38,840,288
Casey’s General Stores, Inc.
Condensed Consolidated Balance
Sheets
(Dollars in thousands)
(Unaudited)
July 31, 2018 April 30, 2018
Assets
Current assets Cash and cash equivalents
$ 44,842 $
53,679 Receivables
46,486 45,045 Inventories
263,879
241,668 Prepaid expenses
8,940 5,766 Income tax receivable
42,404 50,682 Total current assets
406,551 396,840
Other assets, net of amortization
32,769 29,909 Goodwill
140,623 140,258 Property and equipment, net of accumulated
depreciation of $1,662,860 at July 31, 2018 and $1,611,177 at April
30, 2018
2,944,564 2,902,920 Total assets
$
3,524,507 $ 3,469,927
Liabilities and Shareholders’
Equity Current liabilities Notes payable to bank
$
27,411 $ 39,600 Current maturities of long-term debt
15,379 15,374 Accounts payable
333,299 321,419
Accrued expenses
149,424 131,457 Total current liabilities
525,513 507,850 Long-term debt, net of current maturities
1,291,638 1,291,725 Deferred income taxes
349,656
341,946 Deferred compensation
16,095 15,928 Other long-term
liabilities
42,906 41,337 Total liabilities
2,225,808
2,198,786 Total shareholders’ equity
1,298,699 1,271,141
Total liabilities and shareholders’ equity
$
3,524,507 $ 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 & Other Prepared Food
Three
months ended 7/31/2018 Fuel Merchandise & Fountain Other
Total
Revenue $ 1,647,417 $
644,800 $ 281,003 $ 15,212
$ 2,588,432 Revenue less cost of goods sold
(exclusive of depreciation and amortization) $
123,476 $ 208,925 $ 174,184
$ 15,183 $ 521,768 7.5 %
32.4 % 62.0 % 99.8 %
20.2 % Fuel gallons 601,795
Three months ended 7/31/2017 Revenue $ 1,220,985 $ 597,413 $
261,840 $ 13,501 $ 2,093,739 Revenue less cost of goods sold
(exclusive of depreciation and amortization) $ 109,212 $ 190,364 $
163,645 $ 13,476 $ 476,697 8.9 % 31.9 % 62.5 % 99.8 % 22.8 % Fuel
gallons 565,047
Fuel Gallons
Fuel Margin Same-store Sales (Cents per gallon,
excluding credit card fees) Q1 Q2 Q3 Q4
FiscalYear
Q1 Q2 Q3 Q4
FiscalYear
F2019 0.5 % F2019 20.5¢ 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
FiscalYear
Q1 Q2 Q3 Q4
FiscalYear
F2019 3.2 % F2019 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
FiscalYear
Q1 Q2 Q3 Q4
FiscalYear
F2019 1.7 % F2019 62.0 %
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 September 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 September 11, 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180910005885/en/
Casey’s General Stores, Inc.Bill Walljasper, 515-965-6505
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