10-KPeriod: FY2017

CASEYS GENERAL STORES INC Annual Report, Year Ended Apr 30, 2017

Filed June 29, 2017For Securities:CASY

Summary

Casey's General Stores, Inc. (CASY) operates a network of convenience stores primarily in 15 Midwestern states. As of April 30, 2017, the company reported 1,978 stores in operation, with a strategic focus on smaller communities (57% of stores in populations under 5,000) while also serving larger towns. The business model emphasizes a broad product selection, including freshly prepared foods like pizza and donuts, alongside fuel sales, which accounted for approximately 59% of total revenue in fiscal year 2017. The company demonstrated revenue growth in fiscal year 2017, driven by an increase in fuel gallons sold and strong inside sales. However, net income saw a decrease compared to the prior year, attributed to a weaker agricultural economy impacting customer traffic and rising wage costs. Despite these challenges, Casey's continues to invest in growth through new store construction, acquisitions, and major remodels, underscoring a commitment to expansion and operational improvement. The company also maintains a shareholder-friendly approach with a consistent dividend payout and a recently initiated share repurchase program.

Financial Highlights

49 data points
Beta

Revenue

$7.51B

22.4% Gross Margin

Net Income

$177.49M

2.4% Net Margin

EPS (Diluted)

$4.48

Total Assets

$3.02B

Cash & Equivalents

$76.72M

Free Cash Flow

$25.88M

Financial Statements
Beta
Revenue$7.51B
Cost of Revenue$5.83B
Gross Profit$1.68B
Operating Expenses$1.17B
Interest Expense$41.54M
Net Income$177.49M
EPS (Basic)$4.54
EPS (Diluted)$4.48
Shares Outstanding (Basic)39.12M
Shares Outstanding (Diluted)39.58M

Key Highlights

  • 1The company operated 1,978 convenience stores across 15 Midwestern states as of April 30, 2017, with a significant presence in smaller communities.
  • 2Fuel sales represented approximately 59% of total revenue ($4.41 billion) in fiscal year 2017, with inside sales (merchandise and prepared foods) contributing the remaining 41%.
  • 3Total revenue increased by 5.4% to $7.51 billion in fiscal year 2017, driven by higher fuel gallon sales and a 6.5% increase in inside sales.
  • 4Net income decreased by 21.5% to $177.5 million in fiscal year 2017, primarily due to a weaker agricultural economy affecting customer traffic and increased operating expenses, notably wages.
  • 5The company acquired 22 stores and completed 48 new store constructions in fiscal year 2017, indicating a focus on expansion.
  • 6Gross profit margin for prepared food and fountain items remained strong at approximately 62.3% in fiscal year 2017, highlighting the profitability of this segment.
  • 7Casey's initiated a $300 million share repurchase program during the fourth quarter of fiscal year 2017 and repurchased approximately $49.4 million of its stock by year-end.

Frequently Asked Questions

Casey's General Stores primarily operates convenience stores under the 'Casey's' and 'Casey's General Store' names. Their geographic focus is on 15 Midwestern states, with a particular emphasis on smaller communities (populations under 5,000), though they also serve larger towns. Their business model combines convenience store offerings with fuel sales and a significant focus on freshly prepared foods like pizza and donuts.

In fiscal year 2017, Casey's saw an increase in total revenue to $7.51 billion, up 5.4% from $7.12 billion in fiscal year 2016. This growth was driven by higher fuel gallon sales and a 6.5% increase in inside sales. However, net income decreased to $177.5 million from $226.0 million in the prior year. This decline was attributed to a weaker agricultural economy impacting customer traffic and increased operating expenses, particularly wages.

Casey's growth strategy involves expanding its store network through new constructions and acquisitions. In fiscal year 2017, they acquired 22 stores and built 48 new ones. They also focus on enhancing profitability through initiatives like major store remodels and expanding their prepared food offerings, which have high gross profit margins. The company also returns value to shareholders through dividends and a share repurchase program.

Key risks include intense competition in the convenience store and fuel industries, the volatility of wholesale petroleum costs affecting fuel margins, potential shifts towards alternative motor fuels, increased credit card expenses, and regulatory changes affecting tobacco products. Additionally, the company faces risks related to general economic conditions, unfavorable weather, cybersecurity threats, and the ability to identify and integrate new store acquisitions.