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CASY - Casey`s General Stores, Inc.
$230.26
-1.65(-0.71%)8:00:00 PM 5/26/2023
Casey's is a chain of convenience stores in the Midwestern and Southern United States. The company is headquartered in Ankeny, Iowa, a suburb of Des Moines. As of April 30, 2019, Casey's had 2,146 stores in 16 states. In 1959, Donald Lamberti leased a service station in Des Moines, Iowa, from his father. After successfully remodeling the station into a convenience store and operating it for nine years, his gasoline supplier and friend, Kurvin C. Fish, suggested that he purchase the Square Deal Oil Company, a service station available for sale in Boone, Iowa. Lamberti followed Fish's advice and purchased the station, which he renamed "Casey's" after Fish and as with his leased store converted the station into a convenience store. The logo on the Boone store is the same logo used today by the Casey's chain.

Financials

Quarterly financials
(USD)Oct 2022Q/Q
Revenue4B-11%
Gross Profit810.9MM-
Cost Of Revenue3.2B-12%
Operating Income271.7MM-
Operating Expenses539.2MM-1%
Net Income137.6MM-10%
Interest Expense13.5MM-2%

Highlights of Management Discussion and Risk Factors in 10-K/10-Q filling

Positive
1.
Total revenues were impacted favorably by operating 41 more stores than a year ago, elevated retail fuel prices, and strategic retail price adjustments.
2.
Total revenues were impacted favorably by operating 41 more stores than a year ago, elevated retail fuel prices, and strategic retail price adjustments.
3.
Management believes that by acquiring, building, and reinvesting in stores, the Company will be better able to respond to competitive challenges and increase operating efficiencies.
4.
While COVID-19 will continue to bring challenges and uncertainty to our operating environment, we believe that our resilient business model and the strength of our brand and balance sheet position us well to navigate the lingering impacts or the pandemic.
5.
During this same period, retail sales of grocery and general merchandise increased by $63,185 (8.6%), due to strong sales of packaged beverages, snacks, and candy.
6.
During this same period, retail sales of grocery and general merchandise increased by $238,456 (9.9%) due to strong sales of packaged beverages, snacks, and candy.
7.
Both categories were also impacted favorably by strategic retail price adjustments.
8.
The increase in prepared food and dispensed beverage same-store sales was attributable to improved sales in pizza slices and donuts.
9.
Every new store has the capability to sell higher blended ethanol, and we aim to continue growing sales of renewable fuels throughout our footprint.
10.
The increase in grocery and general merchandise same-store sales was primarily due to stronger sales of alcoholic and non-alcoholic beverages, as well as snacks and candy.
11.
Additionally, the current year percentage was positively impacted by joint strategic business planning with vendor partners and strategic retail price adjustments, offset by inflationary pressures.
12.
Net income increased by $36,088 (56.4%) to $100,112 from $64,024 in the comparable period in the prior year.
13.
Diluted EPS benefited by $0.31 due to a one-time operating expense reduction of approximately $15.3 million from the resolution of a legal matter.
14.
The increase in net income was primarily attributable to higher profitability both inside the store and in fuel, which was partially offset by higher operating expenses due to operating 41 more stores than a year ago, an increase in store operations cost, as well as increased credit card fees resulting from increased revenue.
15.
The increase in net income was primarily attributable to higher profitability both inside the store and in fuel, which was partially offset by higher operating expenses due to operating 41 more stores than a year ago, an increase in store operations cost, as well as increased credit card fees resulting from increased revenue.
16.
16Table of ContentsGrocery and general merchandise revenue less related cost of goods sold (exclusive of depreciation and amortization) increased to 33.7% of grocery and general merchandise revenue, compared to 32.8% in the prior year, largely attributable to a favorable mix shift to higher margin items like energy drinks and candy, as well as private label products.
17.
For the nine months ended January 31, 2023, EBITDA and Adjusted EBITDA increased 23.8% and 24.9%, respectively, when compared to the same period a year ago.
18.
Net income increased by $110,585 (39.5%) to $390,599 from $280,014 in the prior year.
19.
Prepared food and dispensed beverage sales increased by $97,510 (10.7%) driven by increased sales of pizza slices, whole pies, and the breakfast menu relaunch.
20.
The increase in the ratio from the prior year is primarily attributable to an increase in cash and cash equivalents due to strong free cash flows.
21.
Grocery and general merchandise revenue less related cost of goods sold (exclusive of depreciation and amortization) was 34.0% of revenue for the third quarter of fiscal 2023, compared to 32.0% for the comparable period in the prior year, largely attributable to a favorable mix shift to higher margin items like energy drinks and candy, as well as private label products.
22.
Same-store employee expense was also up 1%, benefited by a 1% reduction in same-store hours.
23.
The Company sold 1.5 million RINs for $2.9 million during the quarter, compared to the sale of 7.5 million RINs in the third quarter of the prior year, which generated $10.2 million (see footnote 3, above, for a further description of RINs [renewable identification numbers] and how they are generated).14Table of ContentsSame-store sales of grocery and general merchandise increased 5.8% and prepared food and dispensed beverage increased 5.0% during the quarter.
24.
As consumer demand for alternative fuel options continues to grow, Casey’s has continued to add EV charging stations across our 16-state footprint.
25.
A one-time benefit from the resolution of a legal matter reduced operating expenses by approximately 3%.
26.
A one-time benefit from the resolution of a legal matter reduced operating expenses by approximately 1%.
27.
Retail fuel sales increased by $1,922,087 (32.2%) as the average retail price per gallon increased 27.1%, and the number of gallons sold increased 78,389 (4.0%).
28.
Other revenues increased $14,069 (6.5%) through the third quarter of fiscal 2023 compared to the prior year, driven primarily by the higher price of fuel related to the dealer network.
29.
Prepared food and dispensed beverage sales increased by $20,640 (7.0%), due to increased sales of pizza slices and donuts.
30.
Revenue per gallon less cost of goods sold (exclusive of depreciation and amortization) per gallon increased to 40.7 cents in the third quarter of fiscal 2023, compared to 38.3 cents for the comparable period in the prior year.
31.
Retail fuel sales increased by $205,811 (10.5%) as the average retail price per gallon increased 6.6%, and the number of gallons sold increased by 23,170 (3.7%).
32.
The Company believes this is largely contributed to by the increased prevalence and acceptance across all industries of working from home, a trend which the Company expects to continue into the foreseeable future.
33.
Electric Vehicles and Renewable FuelsCasey's is in the process of developing a more robust electric vehicle ("EV") strategy and our management team remains committed to understanding if and how the increased demand for, and usage of, EVs impacts consumer behavior across our store footprint and beyond.
34.
Our installation strategy is currently designed to selectively increase our charging stations at locations within our region where we see higher levels of consumer EV buying trends and demand for EV charging.
35.
The increases in EBITDA and Adjusted EBITDA are primarily attributable to increased fuel and inside contribution, offset by higher operating expenses driven primarily from operating 41 more stores than a year ago, an increase in store operations cost, and an increase in credit card fees primarily due to the record high retail price of fuel.
Negative
1.
The initial onset of COVID-19 also caused a significant decrease in store traffic across our entire footprint.
2.
Other supply chain challenges have included the unavailability of certain products from our suppliers, which has led to these products being out of stock or not available at 13Table of Contentsall.
3.
While the Company has been successful in hiring and retaining store team members and drivers, some supplier networks have been challenged by a lack of their own drivers, which in some cases has led to delays in deliveries to our distribution centers and stores.
4.
Other revenues decreased $5,798 (8.1%) for the third quarter of fiscal 2023 compared to the prior year, driven primarily by fewer gallons sold related to the dealer network.
5.
Governmental Actions, Regulations, and Oversight: Compliance with and changes in tax laws could adversely affect our performance; we are subject to extensive governmental regulations; governmental action and campaigns to discourage tobacco and nicotine use and other tobacco products may have a material adverse effect on our revenues and gross profit; and, wholesale cost and tax increases relating to tobacco and nicotine products could affect our operating results.
6.
To date, consumer EV demand within our Midwest footprint has been comparatively lower than the levels along the coasts.
7.
The third quarter results reflected a 0.5% decrease in same-store fuel gallons sold, with an average fuel revenue less related cost of goods sold (exclusive of depreciation and amortization) of 40.7 cents per gallon, compared to 38.3 cents per gallon in the same quarter a year ago.
8.
While the Company believes that its average revenue less cost of goods sold per gallon (excluding depreciation and amortization) will remain elevated from prior levels for the foreseeable future, it is possible that increased oil and fuel prices, rising interest rates, macroeconomic conditions and/or continuing conflicts or disruptions involving oil producing countries may materially impact the performance of this metric.
9.
Prepared food and dispensed beverage revenue less related cost of goods sold (exclusive of depreciation and amortization) decreased to 56.5% of revenue, compared to 59.9% in the prior year, primarily due to higher ingredient costs, notably cheese, and higher levels of stales, which were partially offset by retail price adjustments.
10.
Prepared food and dispensed beverage revenue less related cost of goods sold (exclusive of depreciation and amortization) decreased to 57.3% of revenue, compared to 58.0% of revenue for the comparable period in the prior year, primarily due to higher ingredient costs, notably cheese, which was partially offset by retail price adjustments.
The management discussion contents above are extracted from this specific SEC Edgar 10-Q filling, with report date as 2023-01-31 and filed on 2023-03-07. The process is fully automated and without human validation. Although we make every effort getting the relevant information, please be advised that We make no representation or warranties of any kind about completeness, accuracy, reliability, suitability or availability of the information exacted from Edgar 10-K/10-Q filings.
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