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Mayank Marwah
Mayank Marwah
Articles (1054) 

What Investors Should Know About Casey's General Stores' 2nd-Quarter Results

Company surpassed Wall Street's projections

December 08, 2020 | About:

Casey's General Stores Inc. (NASDAQ:CASY) came out with its fiscal second-quarter 2021 financial results on Dec. 7 after the market closed. The company's earnings and revenue beat Wall Street's projections.

Highlights

The Ankeny, lowa-based company reported quarterly earnings per share of $3, which was higher than analyst forecasts of $2.66. The company's quarterly revenue came in at $2.22 billion, which was down 10.93% on a year-over-year basis. Analysts had projected revenue of $2.20 billion.

The company's operating expenses surged during the quarter due to new store openings as well as coronavirus-related expenses of $5 million. The company incurred more than $9 million in incremental short and long-term incentive compensation costs owing to performance-based compensation for high-level employees and executives. This was partly negated by a reduction in store hours and credit card fees.

The company's President and CEO Darren Rebelez had the following to say:

"Casey's had a remarkable second quarter and is well on our way to executing our long-term strategic plan. The Company delivered well-balanced financial results, with contributions from both ongoing strong fuel profitability and inside sales volume and profit improvements. Casey's also recently announced an agreement for the largest acquisition in the Company's history, the 94-store Bucky's chain located primarily in Illinois and Nebraska. Finally, the Board's decision to raise the dividend is a sign of continuing confidence in the Company's ability to achieve strong financial results and maintain our already excellent financial flexibility in both the short and long term."

The store count at the end of the quarter was 2,219. The company has 14 new stores under construction.

The company is authorized to buy back shares worth $300 million under the stock buyback program. However, the company did not buy back shares during the quarter.

Sector growth

Sales in the fuel category amounted to $1.19 billion in the second quarter, down from $1.51 billion reported last year. Likewise, same-store sales plunged 8.6% from the year-ago quarter courtesy of lower guest traffic. The segment's average margin was 35.3%, positively impacted by company's centralized retail pricing capability and procurement initiatives.

In the categories of grocery and merchandise, sales amounted to $1.45 billion in the reported quarter. That compares with $1.35 billion reported a year earlier. Same-store sales were up 6.6%. The company had an average margin of 33.3%.

In the prepared food and fountain category, total sales for the quarter came in at $559.6 million. This is down from $593.7 million reported in the same quarter last year. Same-store sales plummeted 3.6%. The segment's average margin stood at 60.1%.

Financials and dividend

For the quarter ended Oct. 31, the convenience store chain had cash and cash equivalents of $405 million. In addition, the company had $325 million in additional borrowing capacity under the existing lines of credit.

The Board of Directors of the company declared a quarterly dividend of 34 cents per share, which wil be payable to the shareholders on Feb. 15, 2021.

Guidance

The company did not provide any financial forecast.

Disclosure: I do not hold any positions in the stocks mentioned.

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About the author:

Mayank Marwah
A seasoned writer with keen interest in the automotive, technology, telecommunication, retail and aerospace sectors.

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