10-QPeriod: Q2 FY2023

CASEYS GENERAL STORES INC Quarterly Report for Q2 Ended Oct 31, 2022

Filed December 6, 2022For Securities:CASY

Summary

Casey's General Stores, Inc. (CASY) reported strong performance in its second-quarter fiscal year 2023, reflecting robust growth in both revenue and net income. The company saw a significant increase in total revenue, driven by a combination of expanded store count and higher retail fuel prices, alongside strategic price adjustments in its grocery and prepared food segments. This growth translated into a substantial improvement in profitability, with net income rising considerably compared to the prior year's period. The company is effectively managing operational costs despite increased store count and inflationary pressures, demonstrating resilience in its business model. Investments in store growth, including acquisitions and new constructions, continue to be a focus, supported by a strong cash flow from operations and available credit facilities. Casey's is also strategically addressing evolving consumer demands, such as incorporating electric vehicle charging stations and expanding renewable fuel options, positioning itself for future trends.

Financial Highlights

45 data points
Beta

Revenue

$3.98B

Net Income

$137.56M

3.5% Net Margin

EPS (Diluted)

$3.67

Total Assets

$5.79B

Cash & Equivalents

$414.80M

Free Cash Flow

$114.64M

Financial Statements
Beta
Revenue$3.98B
Operating Expenses$539.21M
Interest Expense$13.50M
Net Income$137.56M
EPS (Basic)$3.69
EPS (Diluted)$3.67
Shares Outstanding (Basic)37.28M
Shares Outstanding (Diluted)37.52M

Key Highlights

  • 1Total revenue increased by 21.9% to $3.98 billion for the quarter ended October 31, 2022, compared to the prior year, driven by increased store count and elevated fuel prices.
  • 2Net income rose significantly by 42.1% to $137.6 million for the quarter ended October 31, 2022, compared to $96.8 million in the prior year.
  • 3Same-store sales for grocery and general merchandise increased by 6.9%, and prepared food and dispensed beverage sales increased by 10.5%, indicating strong in-store performance.
  • 4Fuel revenue less cost of goods sold per gallon increased to 40.5 cents, up from 34.7 cents in the prior year's comparable quarter, highlighting improved fuel margins.
  • 5The company continues to expand its physical footprint, ending the quarter with 2,463 stores, an increase of 11 stores since April 30, 2022.
  • 6Cash and cash equivalents increased to $414.8 million at October 31, 2022, from $158.9 million at April 30, 2022, indicating strong liquidity.
  • 7EBITDA increased by 25.3% to $271.7 million for the quarter ended October 31, 2022, compared to the prior year, demonstrating improved operating performance.

Frequently Asked Questions

Casey's revenue growth was primarily driven by an increase in the total number of stores in operation (83 more stores than the prior year), elevated retail fuel prices, and strategic retail price adjustments across its product categories, particularly in grocery, general merchandise, and prepared foods.

Casey's experienced an increase in operating expenses, partly due to operating more stores and higher credit card fees from increased fuel prices. However, the company benefited from a reduction in same-store hours and strategic labor management, which helped to partially offset these increases. The company also highlights joint strategic business planning with vendors and price adjustments as contributing factors.

Casey's anticipates that elevated fuel prices will remain throughout fiscal year 2023. While the margin per gallon (revenue less cost of goods sold) has been historically high, it is noted that this metric can fluctuate. The company's current strategy includes strategic retail price adjustments to manage margins in this volatile environment.

Casey's is actively developing its electric vehicle (EV) strategy by installing EV charging stations at select locations where consumer demand is evident, although demand in its Midwest footprint is currently lower than coastal regions. The company also remains committed to renewable fuels, with 100% of its stores offering fuel with at least 10% ethanol blend and a significant portion offering biodiesel.