10-QPeriod: Q1 FY2023

CASEYS GENERAL STORES INC Quarterly Report for Q1 Ended Jul 31, 2022

Filed September 7, 2022For Securities:CASY

Summary

Casey's General Stores, Inc. reported a strong first quarter for fiscal year 2023, with total revenue increasing by 40.0% to $4.45 billion compared to the prior year, driven by a significant rise in fuel prices and expanded store count. Net income saw a healthy increase of 28.3% to $152.9 million, translating to diluted earnings per share of $4.09, up from $3.19 in the prior year period. The company continues to grow its footprint, ending the quarter with 2,454 stores, an increase of two stores from the previous quarter, reflecting strategic acquisitions and new builds. The company navigated significant fuel price volatility and ongoing supply chain and labor challenges stemming from the COVID-19 pandemic. Despite a decrease in same-store fuel gallons sold due to higher prices, the increase in average fuel revenue less cost of goods sold per gallon, coupled with robust growth in same-store sales for grocery/general merchandise (up 5.5%) and prepared food/dispensed beverages (up 8.4%), fueled overall revenue growth. Operating expenses increased due to the expanded store base and higher credit card fees, but the company demonstrated strong operational execution to deliver improved profitability.

Financial Highlights

45 data points
Beta

Revenue

$4.45B

Net Income

$152.93M

3.4% Net Margin

EPS (Diluted)

$4.09

Total Assets

$5.68B

Cash & Equivalents

$312.36M

Free Cash Flow

$194.14M

Financial Statements
Beta
Revenue$4.45B
Operating Expenses$543.27M
Interest Expense$13.82M
Net Income$152.93M
EPS (Basic)$4.11
EPS (Diluted)$4.09
Shares Outstanding (Basic)37.22M
Shares Outstanding (Diluted)37.41M

Key Highlights

  • 1Total revenue surged by 40.0% to $4.45 billion in Q1 FY2023, primarily due to higher fuel prices and an expanded store base.
  • 2Net income increased by 28.3% to $152.9 million, with diluted EPS rising to $4.09 from $3.19 in the prior year quarter.
  • 3Same-store sales in Grocery & General Merchandise increased by 5.5%, and Prepared Food & Dispensed Beverage increased by 8.4%, indicating strong in-store performance.
  • 4Despite a 2.3% decrease in same-store fuel gallons sold, the average fuel revenue less cost of goods sold per gallon increased significantly to 44.7 cents.
  • 5The company expanded its store count to 2,454, reflecting continued strategic growth through acquisitions and new store development.
  • 6Operating expenses rose 13.4%, impacted by the additional stores and increased credit card fees due to higher fuel prices.
  • 7Casey's maintained strong liquidity, with cash and cash equivalents significantly increasing to $312.4 million from $158.9 million at the end of the previous fiscal year.

Frequently Asked Questions

Revenue growth was primarily driven by a substantial increase in retail fuel prices, which led to a 57.4% rise in retail fuel sales. Additionally, the company operated more stores (74 more than the prior year) and implemented strategic price adjustments across grocery, general merchandise, and prepared food categories, which also contributed to the revenue increase.

Casey's experienced significant fuel price volatility but managed to increase its average revenue less cost of goods sold per gallon to 44.7 cents, up from 35.1 cents in the prior year. While supply chain and labor challenges persisted due to COVID-19, the company reported success in hiring and retaining staff and managing product availability, though these issues are expected to continue into fiscal year 2023.

The company reported positive momentum in its non-fuel segments, with same-store sales for grocery and general merchandise increasing by 5.5% and prepared food and dispensed beverages increasing by 8.4%. These increases were attributed to strong sales of packaged beverages, grocery items, pizza, and breakfast items, further supported by strategic pricing initiatives.

Casey's is in the early stages of developing its electric vehicle (EV) strategy, having installed 126 charging stations at 27 stores. The company plans to selectively install more charging stations in locations with higher consumer EV usage, acknowledging that current demand in its Midwest footprint is lower than coastal regions. They also continue to promote renewable fuel options, with 100% of stores offering ethanol-blended fuel and 44% offering biodiesel.