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Category: Stock Market and Casey's
Date: 9 June 2020 Stock Price: $169.51 We take a look at the 4th quarter earnings release of their 2020 fiscal year of Casey's General Stores on of the biggest general store groups in the USA, with their latest quarterly revenues topping $1.8 billion.
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About Casey's General Stores
Headquartered in Ankeny, Iowa, Casey's General Stores, Inc. operates more than 2,000 convenience stores in 16 Midwestern states. Casey's offers self-service gasoline, a wide selection of grocery items and an array of freshly prepared food items. Among the most popular of Casey's prepared foods are their made-from-scratch pizzas, donuts, subs and sandwiches. Casey's operates from two company distribution centers, enabling an approximate delivery of 90% of in-store products as well as 75% of fuel.
The first store opened in 1968 in Boone, Iowa. In the years following, Casey's found success by opening stores in other small towns across Iowa. Approximately 57% of Casey's stores are still found in areas with populations of 5,000 or less. In contrast, roughly 17% of Casey's are now located in areas with populations of 20,000 or more. Casey's has a strong balance sheet and owns nearly all of its assets, which allows the company to consistently take advantage of growth opportunities.
The first store opened in 1968 in Boone, Iowa. In the years following, Casey's found success by opening stores in other small towns across Iowa. Approximately 57% of Casey's stores are still found in areas with populations of 5,000 or less. In contrast, roughly 17% of Casey's are now located in areas with populations of 20,000 or more. Casey's has a strong balance sheet and owns nearly all of its assets, which allows the company to consistently take advantage of growth opportunities.
Overview of Casey's General Stores 4th quarter 2020 earnings report
The numbers we are interested in (for the quarter):
- Total Revenue: $1.812 billion (down from $2.178 billion for the same quarter of the previous year)
- Total revenues decreased by -16.8% over the last 12 months
- Cost of goods sold: $1.287 billion (down from $1.726 billion for the same quarter of the previous year)
- Cost of goods sold decreased by -25.4% over the last 12 months
- Net income: $62.091 million (up from $25.212 million for the same quarter of the previous year)
- Diluted income per share: $1.67 (up from $0.68 for the same quarter of the previous year)
- PE ratio of Casey's: 25.3
- Dividend declared for quarter: $0.32
- Dividend yield of Casey's: 0.81%
- Diluted number of shares outstanding: 37.207 million (up from 37.020 million for the same quarter of the previous year)
- Cash and cash equivalents: $78.275 million
- Cash and cash equivalents per share: $2.10
- Cash and cash equivalents makes up 1.98% of Casey's total assets
- Cash and cash equivalents makes up 1.3% of Casey's current market capital
- Receivables: $48.500 million
- Trade receivables makes up 1.23% of Casey's total assets
- Inventories: $236.007 million
- Inventories makes up 5.99% of Casey's total assets
- Stockholders equity in Casey's General Stores: $1.643 billion
- Stockholders equity per share: $44.16
- Casey's General Stores are trading at 3.6 times its stockholders equity per share which is within the expected range of between 2 and 4 times that most firms tend to trade at
- For perspective the average price to book value of firms in the S&P 500 is 3.7. Read more about the S&P 500 here
Casey's General Stores' management commentary on their 4th quarter 2020 earnings report
ANKENY, Iowa--(BUSINESS WIRE)-- Casey’s General Stores, Inc. ("Casey's" or the "Company") (Nasdaq symbol CASY) today reported diluted earnings per share of $1.67 for the fourth quarter of its fiscal year ended April 30, 2020, compared to $0.68 for the same period a year ago. Diluted earnings per share was $7.10 for the year, compared to $5.51 last year. “The COVID-19 pandemic has created unprecedented challenges globally. I am exceptionally proud of our team members, who have risen to the challenge to safely serve our guests throughout this period,” said Darren Rebelez, President and Chief Executive Officer. "While it is difficult to predict the future impact of this crisis, we are confident that our adaptive business model, the agility of our team members, and our financial strength provides us the resiliency to operate in the current environment," stated Rebelez.
Fuel - For the quarter, the average margin was 40.8 cents per gallon, compared to 18.6 cents per gallon for the same quarter a year ago. Same-store gallons sold in the quarter decreased 14.7%. Total gross profit dollars for the quarter increased over 96% to $198.8 million, while total gallons sold for the quarter decreased 10.7% to 487.7 million. “Same-store gallons sold for the first half of the quarter were strong. Shelter in place restrictions for the back half of the quarter significantly affected quarterly gallon volume," said Rebelez. “At the same time, macro-economic factors led to declining wholesale fuel costs which contributed to unprecedented fuel margins.” For fiscal 2020, total gross profit dollars were up 31.9% to $614.8 million, while total gallons sold were steady at 2.3 billion. For the year, same-store gallons sold were down 5.1% with an average margin of 26.8 cents per gallon. “We continue to believe our procurement and retail price optimization strategies will provide strong benefit for us moving forward, as we look to grow our fuel business and its capabilities,” added Rebelez.
Grocery and Other Merchandise - For the fourth quarter, same-store sales were down 2.0% with an average margin of 30.4%. Same-store sales for the fiscal year were up 1.9% with an average margin of 32.0%. "We had significant momentum for the first half of the quarter inside the store, but slowing customer traffic related to COVID-19 contributed to overall volume declines,” said Rebelez. "Stronger sales of lower margin products relative to other categories led to a reduction in the average margin for the quarter. However, we remain optimistic about our strategic initiatives that we believe will drive future results." Total sales for the quarter were up 1.0% to $568.1 million while total gross profit dollars decreased 2.4% to $172.9 million. For the year, total sales were up 5.5% to $2.5 billion and gross profit dollars increased 5.3% to $800.1 million.
Prepared Food and Fountain - For the fourth quarter, same-store sales were down 13.5% with an average margin of 60.0%. "Same-store sales in this category were also strong for the first half of the quarter. COVID-19 related traffic declines in the last half of the quarter combined with regulations prohibiting self-serve food service adversely affected quarterly results," said Rebelez. “However, the continued expansion of our digital programs and an increased focus on providing value to our guests helped drive double-digit growth in whole-pie sales for the quarter.” The average margin was adversely impacted by higher commodity costs, along with increased promotional activity in the back half of the quarter. Total gross profit dollars for the quarter were down 12.8% to $137.8 million while total sales decreased 9.5% to $229.9 million. For fiscal 2020, total gross profit dollars were effectively flat at $668.1 million, and total sales increased 2.1% to $1.1 billion.
Fuel - For the quarter, the average margin was 40.8 cents per gallon, compared to 18.6 cents per gallon for the same quarter a year ago. Same-store gallons sold in the quarter decreased 14.7%. Total gross profit dollars for the quarter increased over 96% to $198.8 million, while total gallons sold for the quarter decreased 10.7% to 487.7 million. “Same-store gallons sold for the first half of the quarter were strong. Shelter in place restrictions for the back half of the quarter significantly affected quarterly gallon volume," said Rebelez. “At the same time, macro-economic factors led to declining wholesale fuel costs which contributed to unprecedented fuel margins.” For fiscal 2020, total gross profit dollars were up 31.9% to $614.8 million, while total gallons sold were steady at 2.3 billion. For the year, same-store gallons sold were down 5.1% with an average margin of 26.8 cents per gallon. “We continue to believe our procurement and retail price optimization strategies will provide strong benefit for us moving forward, as we look to grow our fuel business and its capabilities,” added Rebelez.
Grocery and Other Merchandise - For the fourth quarter, same-store sales were down 2.0% with an average margin of 30.4%. Same-store sales for the fiscal year were up 1.9% with an average margin of 32.0%. "We had significant momentum for the first half of the quarter inside the store, but slowing customer traffic related to COVID-19 contributed to overall volume declines,” said Rebelez. "Stronger sales of lower margin products relative to other categories led to a reduction in the average margin for the quarter. However, we remain optimistic about our strategic initiatives that we believe will drive future results." Total sales for the quarter were up 1.0% to $568.1 million while total gross profit dollars decreased 2.4% to $172.9 million. For the year, total sales were up 5.5% to $2.5 billion and gross profit dollars increased 5.3% to $800.1 million.
Prepared Food and Fountain - For the fourth quarter, same-store sales were down 13.5% with an average margin of 60.0%. "Same-store sales in this category were also strong for the first half of the quarter. COVID-19 related traffic declines in the last half of the quarter combined with regulations prohibiting self-serve food service adversely affected quarterly results," said Rebelez. “However, the continued expansion of our digital programs and an increased focus on providing value to our guests helped drive double-digit growth in whole-pie sales for the quarter.” The average margin was adversely impacted by higher commodity costs, along with increased promotional activity in the back half of the quarter. Total gross profit dollars for the quarter were down 12.8% to $137.8 million while total sales decreased 9.5% to $229.9 million. For fiscal 2020, total gross profit dollars were effectively flat at $668.1 million, and total sales increased 2.1% to $1.1 billion.
Operating Expenses - For the fourth quarter, operating expenses were up 6.2% to $367.5 million. For the fiscal year, operating expenses increased 7.7% to $1.5 billion. Fourth quarter results were positively impacted by wage expense reductions related to a reduction in hours at the stores and lower credit card fees, offset by higher hourly wage rates and increased costs of cleaning and other pandemic-related supplies. The increase in total operating expenses for fourth quarter and year-to-date was primarily attributable to operating 61 more stores than the same quarter in the prior year. Same-store operating expenses were down 2.0% for the quarter and up 2.2% for the full year. "We adjusted our operating expense spending to address the changing circumstances and shifting needs of our guests. While we incurred significant additional costs related to the COVID-19 crisis, the safety of our team members and guests is our top priority," noted Rebelez.
As of April 30, 2020, the Company had 2 acquisition stores under agreement to purchase and a new store pipeline of 93 sites, including 24 under construction. "We temporarily deferred some spending related to new store construction as a result of COVID-19. We believe we are well positioned to continue our growth through a combination of reaccelerating organic development and a disciplined acquisition strategy," said Rebelez.
Share Repurchase Program - The Company has $300 million remaining under its existing share repurchase program. There were no repurchases made against that authorization in the fourth quarter.
Dividend - At its June meeting, the Board of Directors declared a quarterly dividend of $0.32 per share. The dividend is payable August 17, 2020 to shareholders of record on August 3, 2020.
Fiscal 2021 Guidance - Due to the continued uncertainty of COVID-19, guidance for the fiscal year ending April 30, 2021 will not be provided at this time. This will be reevaluated as conditions warrant.
As of April 30, 2020, the Company had 2 acquisition stores under agreement to purchase and a new store pipeline of 93 sites, including 24 under construction. "We temporarily deferred some spending related to new store construction as a result of COVID-19. We believe we are well positioned to continue our growth through a combination of reaccelerating organic development and a disciplined acquisition strategy," said Rebelez.
Share Repurchase Program - The Company has $300 million remaining under its existing share repurchase program. There were no repurchases made against that authorization in the fourth quarter.
Dividend - At its June meeting, the Board of Directors declared a quarterly dividend of $0.32 per share. The dividend is payable August 17, 2020 to shareholders of record on August 3, 2020.
Fiscal 2021 Guidance - Due to the continued uncertainty of COVID-19, guidance for the fiscal year ending April 30, 2021 will not be provided at this time. This will be reevaluated as conditions warrant.
Casey's General Stores (NASDAQ: CASY) stock price history
The image below shows the stock price history of Casey's over the last 5 years. And its been a very good time for the group. With stockholders being handsomely rewarded during the last 5 years. 5 years ago the stock was trading at around $93 and its currently trading at $169.51 Thats a very handsome 82.2% return over the last 5 years.
Casey's is trading at a lot closer to its 52 week high of $181,99 than it is to its 52 week low of $114.01 which to us is indication that the sentiment and momentum of Casey's stock is very positive.
Casey's is trading at a lot closer to its 52 week high of $181,99 than it is to its 52 week low of $114.01 which to us is indication that the sentiment and momentum of Casey's stock is very positive.
Casey's General Stores (CASY) vs Kroger Company (KR)
The image below shows the stock price performance of Casey's (CASY) and Kroger (KR) over the last 3 years. The trends of the two companies stock performance is vastly different with the two companies stock not really tracking one another. Over the last 3 years the stock of Casey's provided a return of 58.52% while the stock of Kroger Company returned 46% over the same time period. Therefore the stock of Casey's easily outperformed the stock of Kroger.
Recent coverage of Casey's General Stores
The extract below covers the latest earnings from Casey's as obtained from Nasdaq.com
.Casey's General Stores, Inc. CASY reported a negative earnings surprise in the fourth quarter of fiscal 2020, following a beat in the trailing seven quarters. Nonetheless, the bottom line improved on a year-over-year basis. Meanwhile, the top line came ahead of the Zacks Consensus Estimate, after a missing the same in the preceding two quarters. However, the metric declined from the prior-year’s tally. While the first half of the quarter looked strong, the COVID-19 outbreak hurt the company’s overall performance.
Shares of this Zacks Rank #3 (Hold) company have gained 6.8% in the past six months compared with the industry’s rally of 7.5%.
A Closer Look at Q4 Results
Casey's reported quarterly earnings of $1.67 per share that missed the Zacks Consensus Estimate of $1.97 but improved significantly from 68 cents posted in the year-ago period. Total revenues came in at $1,812.9 million, down 16.8% year over year but beat the Zacks Consensus Estimate of $1,781.1 million. We note that decline in revenues across Fuel and Prepared Food & Fountain categories, was partly offset by increase in Grocery & Other Merchandise category.
In spite of decline in the top line, gross profit increased 16.1% year over year to $525.1 million due to fall in cost of goods sold. Notably, gross margin expanded to 29% from 20.8% in the year-ago period. Notably, the company witnessed a decline of 25.4% in cost of goods sold during the reported quarter. However, Casey's registered an increase of 6.2% in operating expenses, primarily attributable to operating 61 more stores than the comparable period last year. Further, rise in hourly wage rates and higher costs of cleaning and other pandemic-related supplies also led to the increase in operating expenses. This was partly offset by fall in wage expense on account of reduction in hours at the stores and lower credit card fees.
Read the full article here
.Casey's General Stores, Inc. CASY reported a negative earnings surprise in the fourth quarter of fiscal 2020, following a beat in the trailing seven quarters. Nonetheless, the bottom line improved on a year-over-year basis. Meanwhile, the top line came ahead of the Zacks Consensus Estimate, after a missing the same in the preceding two quarters. However, the metric declined from the prior-year’s tally. While the first half of the quarter looked strong, the COVID-19 outbreak hurt the company’s overall performance.
Shares of this Zacks Rank #3 (Hold) company have gained 6.8% in the past six months compared with the industry’s rally of 7.5%.
A Closer Look at Q4 Results
Casey's reported quarterly earnings of $1.67 per share that missed the Zacks Consensus Estimate of $1.97 but improved significantly from 68 cents posted in the year-ago period. Total revenues came in at $1,812.9 million, down 16.8% year over year but beat the Zacks Consensus Estimate of $1,781.1 million. We note that decline in revenues across Fuel and Prepared Food & Fountain categories, was partly offset by increase in Grocery & Other Merchandise category.
In spite of decline in the top line, gross profit increased 16.1% year over year to $525.1 million due to fall in cost of goods sold. Notably, gross margin expanded to 29% from 20.8% in the year-ago period. Notably, the company witnessed a decline of 25.4% in cost of goods sold during the reported quarter. However, Casey's registered an increase of 6.2% in operating expenses, primarily attributable to operating 61 more stores than the comparable period last year. Further, rise in hourly wage rates and higher costs of cleaning and other pandemic-related supplies also led to the increase in operating expenses. This was partly offset by fall in wage expense on account of reduction in hours at the stores and lower credit card fees.
Read the full article here
Casey's General Stores (NASDAQ: CASY) latest stock valuation
So based on Casey's latest earnings report what are Casey's General Stores stock worth? Based on the earnings report and fiscal guidance provided by Casey's General Stores our valuation models has a target (full value) price on Casey's General Stores of $167.40 a stock (up slightly from our 2nd quarter 2020 earnings report valuation of Casey's)
We therefore believe the stock of Casey's General Stores is fully valued at its current price of $169.51. We suggest looking to buy into Casey's General Stores of at least 10% below our target price. So a suggested entry price is closer to $157.70 a stock. We expect the stock price of Casey's General Stores to trade in a narrow range around its current price.
We therefore believe the stock of Casey's General Stores is fully valued at its current price of $169.51. We suggest looking to buy into Casey's General Stores of at least 10% below our target price. So a suggested entry price is closer to $157.70 a stock. We expect the stock price of Casey's General Stores to trade in a narrow range around its current price.
Next earnings release of Casey's General Stores
It is expected that Casey's will release their 1st quarter 2021 earnings report in early September 2020