Casey’s General Stores, Inc. ("Casey's" or the "Company")
(Nasdaq: CASY) one of the leading convenience store chains in the
United States, today announced financial results for the three and
nine months ended January 31, 2024.
Third Quarter Key
Highlights
- Diluted EPS of $2.33, down 13% from the same period a year ago.
Net income was $87 million, down 13%, and EBITDA1 was $218 million,
down 2%, from the same period a year ago. In the prior year, net
income, EBITDA and diluted EPS benefited from a one-time operating
expense reduction of approximately $15 million, or $0.31 a share,
from the resolution of a legal matter.
- Inside same-store sales increased 4.1% compared to prior year,
and 9.9% on a two-year stack basis, with an inside margin of 41.3%.
Total inside gross profit increased 11.3% to $501.5 million
compared to the prior year.
- Same-store fuel gallons were down 0.4% compared to prior year
with a fuel margin of 37.3 cents per gallon. Total fuel gross
profit decreased 2.0% to $257.2 million compared to the prior
year.
- Same-store operating expenses excluding credit card fees were
up 2.5%, favorably impacted by a 1% reduction in same-store labor
hours.
"Casey's delivered another solid quarter highlighted by inside
gross profit growth,” said Darren Rebelez, Chairman, President and
CEO. “Inside same-store sales were driven by prepared food and
dispensed beverage, with whole pies and hot sandwiches performing
exceptionally well. Our fuel team navigated a rising cost
environment and delivered nearly flat gallon volume and a 37.3
cents per gallon fuel margin. The operations team performed
exceptionally well this quarter integrating multiple acquisitions,
reducing same-store labor hours while growing sales and driving
positive guest satisfaction scores."
Earnings
Three Months Ended January
31,
Nine Months Ended January 31,
2024
2023
2024
2023
Net income (in thousands)
$
86,933
$
100,112
$
414,952
$
390,599
Diluted earnings per share
$
2.33
$
2.67
$
11.09
$
10.42
EBITDA (in thousands)
$
217,615
$
221,727
$
840,372
$
786,441
For the quarter, net income, diluted EPS, and EBITDA were down
compared to the same period a year ago primarily due to a strong
fuel margin comparison in the prior year, lapping the one-time
operating expense benefit noted above, and higher operating
expenses due to operating 167 additional stores. This was partially
offset by higher profitability inside the store.
__________________________
1 EBITDA is reconciled to net income
below.
Inside
Three Months Ended January
31,
Nine Months Ended January 31,
2024
2023
2024
2023
Inside sales (in thousands)
$
1,214,959
$
1,109,223
$
3,931,619
$
3,644,277
Inside same-store sales
4.1
%
5.6
%
4.1
%
6.6
%
Grocery and general merchandise same-store
sales
2.8
%
5.8
%
3.3
%
6.0
%
Prepared food and dispensed beverage
same-store sales
7.5
%
5.0
%
6.2
%
7.9
%
Inside gross profit (in thousands)
$
501,511
$
450,572
$
1,611,209
$
1,459,307
Inside margin
41.3
%
40.6
%
41.0
%
40.0
%
Grocery and general merchandise margin
33.9
%
34.0
%
34.0
%
33.7
%
Prepared food and dispensed beverage
margin
59.6
%
57.3
%
58.9
%
56.5
%
Total inside sales were up 9.5% for the quarter driven by strong
performance in the prepared food and dispensed beverage category,
including whole pizza pies, hot sandwiches, and dispensed beverages
as well as non-alcoholic and alcoholic beverages in the grocery and
general merchandise category. Inside margin was up 70 basis points
compared to the same quarter a year ago, primarily due to softening
of prepared food and dispensed beverage ingredient costs as well as
modest retail price adjustments.
Fuel2
Three Months Ended January
31,
Nine Months Ended January 31,
2024
2023
2024
2023
Fuel gallons sold (in thousands)
689,251
644,940
2,133,680
2,036,450
Same-store gallons sold
(0.4
)%
(0.5
)%
—
%
(0.9
)%
Fuel gross profit (in thousands)
$
257,246
$
262,573
$
863,059
$
855,167
Fuel margin (cents per gallon, excluding
credit card fees)
37.3 ¢
40.7 ¢
40.4 ¢
42.0 ¢
For the quarter, total fuel gallons sold increased 6.9% compared
to the prior year primarily due to the store count increase, while
same-store gallons were nearly flat versus the prior year. The
Company’s total fuel gross profit was down 2.0% versus the prior
year. The Company sold $3.4 million in renewable fuel credits
(RINs) in the third quarter, an increase of $0.5 million from the
same quarter in the prior year.
Operating
Expenses
Three Months Ended January
31,
Nine Months Ended January 31,
2024
2023
2024
2023
Operating expenses (in thousands)
$
568,908
$
515,735
$
1,709,466
$
1,598,213
Credit card fees (in thousands)
$
51,977
$
54,032
$
175,879
$
181,727
Same-store operating expenses excluding
credit card fees
2.5
%
4.6
%
2.5
%
2.8
%
Operating expenses increased approximately 10% during the third
quarter. Approximately 3% of the increase is due to lapping a $15
million one-time benefit to operating expenses last year from the
resolution of a legal matter. Operating 167 more stores than prior
year accounted for approximately 6% of the increase. Total
same-store employee expense contributed to approximately 1% of the
increase, as the increases in labor rates were partially offset by
a reduction in same-store labor hours.
_____________________________
2 Fuel category does not include wholesale
fuel activity, which is included in Other.
Expansion
Store Count
April 30, 2023
2,521
New store construction
23
Acquisitions
105
Acquisitions not opened
(1)
Prior acquisitions opened
6
Closed
(15)
January 31, 2024
2,639
Liquidity
At January 31, 2024, the Company had approximately $1.1 billion
in available liquidity, consisting of approximately $178 million in
cash and cash equivalents on hand and approximately $899 million in
available borrowing capacity on existing lines of credit.
Share Repurchase
During the third quarter, the Company repurchased approximately
$30 million of shares. The Company has approximately $310 million
remaining under its existing share repurchase authorization.
Dividend
At its March meeting, the Board of Directors approved a
quarterly dividend of $0.43 per share. The dividend is payable May
15, 2024, to shareholders of record on May 1, 2024.
Fiscal 2024 Outlook
The Company is reaffirming its annual outlook. Same-store inside
sales is expected to increase 3.5% to 5%. We expect inside margin
improvement to approximately 40% to 41%. The Company expects
same-store fuel gallons sold to be between negative 1% to positive
1%. Total operating expenses are expected to increase approximately
6% to 8%, though same-store operating expenses excluding credit
card fees are expected to only increase approximately 3% for the
year. Fiscal 2024 EBITDA growth is expected to be in-line with the
long-term strategic plan's goal of 8% to 10%. The Company expects
to add at least 150 stores in fiscal 2024. Net interest expense is
expected to be approximately $53 million. Depreciation and
amortization is expected to be approximately $350 million for the
year and the purchase of property and equipment is expected to be
between $500 to $550 million. The tax rate is expected to be
approximately 23% to 25% for the year. The Company expects to
repurchase at least $100 million in shares throughout the fiscal
year.
Casey’s General Stores, Inc.
and Subsidiaries
Condensed Consolidated
Statements of Income
(Amounts in thousands, except
share and per share amounts)
(Unaudited)
Three Months Ended January
31,
Nine Months Ended January 31,
2024
2023
2024
2023
Total revenue
$
3,329,247
$
3,332,555
$
11,262,898
$
11,765,774
Cost of goods sold (exclusive of
depreciation and amortization, shown separately below)
2,542,724
2,595,093
8,713,060
9,381,120
Operating expenses
568,908
515,735
1,709,466
1,598,213
Depreciation and amortization
88,950
78,088
257,453
232,500
Interest, net
14,146
11,697
38,947
39,015
Income before income taxes
114,519
131,942
543,972
514,926
Federal and state income taxes
27,586
31,830
129,020
124,327
Net income
$
86,933
$
100,112
$
414,952
$
390,599
Net income per common share
Basic
$
2.34
$
2.69
$
11.15
$
10.48
Diluted
$
2.33
$
2.67
$
11.09
$
10.42
Basic weighted average shares
37,100,143
37,281,103
37,210,007
37,261,049
Plus effect of stock compensation
235,940
283,448
199,531
240,459
Diluted weighted average shares
37,336,083
37,564,551
37,409,538
37,501,508
Casey’s General Stores, Inc.
and Subsidiaries
Condensed Consolidated Balance
Sheets
(Dollars in thousands)
(Unaudited)
January 31, 2024
April 30, 2023
Assets
Current assets
Cash and cash equivalents
$
177,881
$
378,869
Receivables
136,691
120,547
Inventories
414,721
376,085
Prepaid expenses
29,946
22,107
Income taxes receivable
21,765
23,347
Total current assets
781,004
920,955
Other assets, net of amortization
197,780
192,153
Goodwill
647,125
615,342
Property and equipment, net of accumulated
depreciation of $2,836,219 at January 31, 2024 and $2,620,149 at
April 30, 2023
4,581,105
4,214,820
Total assets
$
6,207,014
$
5,943,270
Liabilities and Shareholders’
Equity
Current liabilities
Current maturities of long-term debt and
finance lease obligations
$
53,250
$
52,861
Accounts payable
521,948
560,546
Accrued expenses
305,708
313,718
Total current liabilities
880,906
927,125
Long-term debt and finance lease
obligations, net of current maturities
1,583,613
1,620,513
Deferred income taxes
591,811
543,598
Insurance accruals, net of current
portion
33,114
32,312
Other long-term liabilities
170,109
159,056
Total liabilities
3,259,553
3,282,604
Total shareholders’ equity
2,947,461
2,660,666
Total liabilities and shareholders’
equity
$
6,207,014
$
5,943,270
Casey’s General Stores, Inc.
and Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Nine months ended January 31,
2024
2023
Cash flows from operating activities:
Net income
$
414,952
$
390,599
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
257,453
232,500
Amortization of debt issuance costs
833
1,036
Change in excess replacement cost over
LIFO inventory valuation
7,786
20,329
Share-based compensation
29,349
34,741
Loss on disposal of assets and impairment
charges
892
5,977
Deferred income taxes
48,213
24,516
Changes in assets and liabilities:
Receivables
(15,146
)
(19,300
)
Inventories
(33,762
)
(10,433
)
Prepaid expenses
(7,839
)
(6,571
)
Accounts payable
(93,480
)
(100,714
)
Accrued expenses
(10,905
)
20,869
Income taxes
2,335
39,548
Other, net
3,919
3,496
Net cash provided by operating
activities
604,600
636,593
Cash flows from investing activities:
Purchase of property and equipment
(325,726
)
(301,298
)
Payments for acquisition of businesses,
net of cash acquired
(296,809
)
(13,202
)
Proceeds from sales of assets
20,351
13,551
Net cash used in investing activities
(602,184
)
(300,949
)
Cash flows from financing activities:
Payments of long-term debt and finance
lease obligations
(48,364
)
(23,563
)
Payments of cash dividends
(46,975
)
(41,456
)
Repurchase of common stock
(89,768
)
—
Tax withholdings on employee share-based
awards
(18,297
)
(16,304
)
Net cash used in financing activities
(203,404
)
(81,323
)
Net (decrease) increase in cash and cash
equivalents
(200,988
)
254,321
Cash and cash equivalents at beginning of
the period
378,869
158,878
Cash and cash equivalents at end of the
period
$
177,881
$
413,199
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
INFORMATION
Nine months ended January 31,
2024
2023
Cash paid during the period for:
Interest, net of amount capitalized
$
43,316
$
37,765
Income taxes, net
72,037
56,289
Noncash investing and financing
activities:
Purchased property and equipment in
accounts payable
82,785
76,840
Right-of-use assets obtained in exchange
for new finance lease liabilities
14,035
6,909
Right-of-use assets obtained in exchange
for new operating lease liabilities
12,613
13,485
Summary by Category
(Amounts in thousands)
Three months ended January 31,
2024
Prepared Food & Dispensed
Beverage
Grocery & General
Merchandise
Fuel
Other
Total
Revenue
$
349,411
$
865,548
$
2,051,674
$
62,614
$
3,329,247
Gross profit
$
208,327
$
293,184
$
257,246
$
27,766
$
786,523
59.6
%
33.9
%
12.5
%
44.3
%
23.6
%
Fuel gallons sold
689,251
Three months ended January 31, 2023
Revenue
$
313,524
$
795,699
$
2,157,233
$
66,099
$
3,332,555
Gross profit
$
179,647
$
270,925
$
262,573
$
24,317
$
737,462
57.3
%
34.0
%
12.2
%
36.8
%
22.1
%
Fuel gallons sold
644,940
Summary by Category
(Amounts in thousands)
Nine months ended January 31,
2024
Prepared Food & Dispensed
Beverage
Grocery & General
Merchandise
Fuel
Other
Total
Revenue
$
1,104,705
$
2,826,914
$
7,125,485
$
205,794
$
11,262,898
Gross profit
$
650,852
$
960,357
$
863,059
$
75,570
$
2,549,838
58.9
%
34.0
%
12.1
%
36.7
%
22.6
%
Fuel gallons sold
2,133,680
Nine months ended January 31, 2023
Revenue
$
1,008,338
$
2,635,939
$
7,889,495
$
232,002
$
11,765,774
Gross profit
$
569,825
$
889,482
$
855,167
$
70,180
$
2,384,654
56.5
%
33.7
%
10.8
%
30.2
%
20.3
%
Fuel gallons sold
2,036,450
Prepared Food & Dispensed
Beverage
Prepared Food & Dispensed
Beverage
Same-store Sales
Margin
Q1
Q2
Q3
Q4
Fiscal Year
Q1
Q2
Q3
Q4
Fiscal Year
F2024
5.9
%
6.1
%
7.5
%
F2024
58.2
%
59.0
%
59.6
%
F2023
8.4
10.5
5.0
4.9
%
7.1
%
F2023
55.6
56.7
57.3
56.8
%
56.6
%
F2022
10.8
4.1
7.4
7.6
7.4
F2022
61.0
60.6
58.0
56.9
59.2
Grocery & General
Merchandise
Grocery & General
Merchandise
Same-store Sales
Margin
Q1
Q2
Q3
Q4
Fiscal Year
Q1
Q2
Q3
Q4
Fiscal Year
F2024
5.2
%
1.7
%
2.8
%
F2024
34.1
%
34.0
%
33.9
%
F2023
5.5
6.9
5.8
7.1
%
6.3
%
F2023
33.9
33.3
34.0
33.0
%
33.6
%
F2022
7.0
6.8
7.7
4.3
6.3
F2022
33.0
33.3
32.0
32.5
32.7
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
F2024
0.4
%
—
%
(0.4
)%
F2024
41.6 ¢
42.3 ¢
37.3 ¢
F2023
(2.3
)
0.3
(0.5
)
—
%
(0.8
)%
F2023
44.7
40.5
40.7
34.6 ¢
40.2 ¢
F2022
9.0
2.5
5.7
1.5
4.4
F2022
35.1
34.7
38.3
36.2
36.0
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED
EBITDA
We define EBITDA as net income before net interest expense,
income taxes, depreciation and amortization. Adjusted EBITDA
further adjusts EBITDA by excluding the gain or loss on disposal of
assets as well as impairment charges. Neither EBITDA nor Adjusted
EBITDA are considered GAAP measures, and should not be considered
as a substitute for net income, cash flows from operating
activities or other income or cash flow statement data. These
measures have limitations as analytical tools, and should not be
considered in isolation or as substitutes for analysis of our
results as reported under GAAP. We strongly encourage investors to
review our financial statements and publicly filed reports in their
entirety and not to rely on any single financial measure.
We believe EBITDA and Adjusted EBITDA are useful to investors in
evaluating our operating performance because securities analysts
and other interested parties use such calculations as a measure of
financial performance and debt service capabilities, and they are
regularly used by the Company for internal purposes including our
capital budgeting process, evaluating acquisition targets,
assessing performance, and awarding incentive compensation.
Because non-GAAP financial measures are not standardized, EBITDA
and Adjusted EBITDA, as defined by us, may not be comparable to
similarly titled measures reported by other companies. It therefore
may not be possible to compare our use of these non-GAAP financial
measures with those used by other companies.
The following table contains a reconciliation of net income to
EBITDA and Adjusted EBITDA for the three and nine months ended
January 31, 2024 and 2023:
(in thousands)
Three Months Ended January
31,
Nine Months Ended January 31,
2024
2023
2024
2023
Net income
$
86,933
$
100,112
$
414,952
$
390,599
Interest, net
14,146
11,697
38,947
39,015
Federal and state income taxes
27,586
31,830
129,020
124,327
Depreciation and amortization
88,950
78,088
257,453
232,500
EBITDA
217,615
221,727
840,372
786,441
Loss on disposal of assets and impairment
charges
1,124
1,186
892
5,977
Adjusted EBITDA
$
218,739
$
222,913
$
841,264
$
792,418
NOTES:
- Gross Profit is defined as revenue less cost of goods sold
(exclusive of depreciation and amortization)
- Inside is defined as the combination of grocery and general
merchandise and prepared food and dispensed beverage
This release contains statements that may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including those related
to expectations for future periods, possible or assumed future
results of operations, financial conditions, liquidity and related
sources or needs, business and/or integration strategies, plans and
synergies, supply chain, growth opportunities, performance at our
stores. There are a number of known and unknown risks,
uncertainties, and other factors that may cause our actual results
to differ materially from any results expressed or implied by these
forward-looking statements, including but not limited to the
execution of our strategic plan, the integration and financial
performance of acquired stores, wholesale fuel, inventory and
ingredient costs, distribution challenges and disruptions, the
impact and duration of the conflict in Ukraine or other
geopolitical disruptions, as well as other risks, uncertainties and
factors which are described in the Company’s most recent annual
report on Form 10-K and quarterly reports on Form 10-Q, as filed
with the Securities and Exchange Commission and available on our
website. Any forward-looking statements contained in this release
represent our current views as of the date of this release with
respect to future events, and Casey’s disclaims any intention or
obligation to update or revise any forward-looking statements in
the release whether as a result of new information, future events,
or otherwise.
Corporate information is available at this website:
https://www.caseys.com. Earnings will be reported during a
conference call on March 12, 2024. The call will be broadcast live
over the Internet at 7:30 a.m. CDT. To access the call, go to the
Events and Presentations section of our website at
https://investor.caseys.com/events-and-presentations/default.aspx.
No access code is required. A webcast replay of the call will
remain available in an archived format on the Events and
Presentations section of our website at
https://investor.caseys.com/events-and-presentations/default.aspx
for one year after the call.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240311402872/en/
Investor Relations Contact: Brian Johnson, (515)
446-6587 Media Relations Contact: Katie Petru, (515)
446-6772
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