Casey's General Stores Inc. (CASY, Financial) reported its fourth-quarter and full-year fiscal 2021 financial results after the closing bell on June 8. The company's fourth quarter earnings and revenue beat Wall Street's projections.
Highlights
The Ankeny, lowa-based company reported quarterly earnings per share of $1.12, which was higher than analyst forecasts of 67 cents. Quarterly revenue came in at $2.38 billion, which was up 31.19% on a year-over-year basis. Analysts had projected revenue of $2.16 billion.
For full-year fiscal 2021, revenue amounted to $8.71 billion compared to $9.18 billion in fiscal 2020. GAAP earnings were $312.9 million, translating to $8.38 per diluted share. That compares with $263.9 million, or $7.10 per share, recorded in 2020.
The company's operating expenses surged during the quarter due to new store openings coupled with increased store-level operating hours and expenses. The company incurred $8 million in incremental short- and long-term incentive 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.
President and CEO Darren Rebelez had the following to say:
“Casey’s achieved remarkable results throughout the year in one of the most difficult retail environments of our lifetime. The entire Casey’s team proved themselves resilient in spite of these challenges, and made excellent progress on our long-term strategic plan while keeping our people and communities safe. We have great momentum behind our digital engagement efforts, our private brand products have resonated with our guests, our prepared foods business is regaining traction, and we are in the process of welcoming two large acquisitions to the Casey's family. We are now poised to emerge from the pandemic an even stronger company.”
The store count at the end of the quarter was 2,243. The company has 40 new stores under construction.
Casey's is authorized to buy back shares worth $300 million under the stock buyback program. However, it did not repurchase any shares during the quarter.
Sector growth
Sales in the fuel category amounted to $1.45 billion in the fourth quarter, up from $0.9 billion reported last year. Likewise, same-store sales improved 6.4% from the year-ago quarter courtesy of higher guest traffic. The segment's average margin was 33%, positively impacted by the company's centralized retail pricing capability and procurement initiatives.
In the categories of grocery and merchandise, sales amounted to $0.65 billion in the reported quarter. That compares with $0.57 billion reported a year earlier. Same-store sales were up 12.5%. The company had an average margin of 31.8%.
In the prepared food and fountain category, total sales for the quarter came in at $263 million. This is up from $230 million reported in the same quarter last year. Same-store sales inched up 13.4%. The segment's average margin stood at 60.1%.
Key development
The convenience store chain acquired Buchanan Energy, the leading Midwest distributor of branded and unbranded fuels, on May 13. The company used a combination of cash and a $300 million draw on a bank term loan to finance the purchase. Buchanan Energy is projected to contribute roughly $45 million in annual Ebidta in fiscal 2022.
Financials and dividend
For the quarter ended April 30, Casey’s had cash and cash equivalents of $335 million. In addition, the company had $475 million in additional borrowing capacity under the existing lines of credit.
The board of directors declared a quarterly dividend of 34 cents per share, which will be payable to the shareholders on Aug. 16.
Financial forecast
Casey’s did not provide a financial forecast for the fiscal year 2022 with respect to earnings and revenue. However, the company did mention that its operating expenses are estimated to rise by mid-teen percentages, resulting from higher store operating hours and higher expected wages and compensations. Depreciation and amortization expenses are projected to be around $300 million, while tne tax rate is expected to be 26%.
