Casey’s General Stores Inc. (CASY, Financial) came out with its fourth quarter financial results in which the company announced that it made a profit, which fell short from the same period last year.
Diving into the pool of numbers
The company reported quarter earnings per share of 51 cents, which was lower than what the analysts had forecasted. The company’s quarterly revenue came in at $2.089 million, which represents a 13.1% growth from the year-ago quarter but the same was below the analysts’ expectation of $2.132 million.
Furthermore, the company’s cost of goods sold and operating expenses were on the rise during the quarter, up 16.3% and 7.9%, respectively. This brought about a decline in the company’s operating income. Depreciation expense increased 10.5% on a year over year basis. The company’s operating expenses rose 7.9% to $316 million followed by a rise in fuel expense and credit card fees to a combined $4.4 million.
For the fiscal year, the company finished 74 major remodels and opened 85 new store constructions. The company also acquired 26 stores during the year. The company’s store count at the end of the quarter was a total of 2,073 stores. As of now, in terms of store pipeline, the company has 31 new stores under construction. In addition, the company is also under a contract to buy 11 additional stores.
At the end of the quarter, the company’s balance of cash and cash equivalent stood at $53.7 million whereas long-term debt and net maturities came in at $1.3 billion. For the entire year, the company could generate $418 million from cash flow from operating activities. Capital expenditure during the same period was $615 million. During the year, the company indulged itself in increasing new store construction and acquisition activity.
Sector-wise growth
In the categories of grocery and other merchandise, consolidated sales climbed 2.4% to approximately $512 million. By contrast, the segment’s comps were down 0.4% from the year-ago quarter. The sector’s average margin grew to 31.2% in the fourth quarter. As for the whole year, sales jumped 4.6% to $2.2 billion while comps for the same period surged 1.9%.
In the prepared food and fountain category, total sales for the quarter came in at $241 million, which represents a growth of 3.4% on a year over year basis. By contrast, same-store sales plummeted 1.3% in the fourth quarter. For the full-year, the company had an average margin of 61%. Comps growth for the year was 1.7%. During the fourth quarter, the company made some changes and adjustments with regards to promotional and pricing strategy in order to boost customer satisfaction and remain competitive in the market.
Guidance
The company has issued guidance for fiscal 2019. The company expects to build 60 stores and would also look to acquire 20 stores. Depreciation expense is projected to rise by around 14% to 16%. The company estimates its operating expense will increase by around 8.5% to 10.5%. In the grocery and prepared food categories, the company projects sales growth of 1.5% each, along with maintaining an average gross margin in both the segments of 31.5% and 60%, respectively.
Disclosure: I do not hold any position in the stock mentioned in this article.
