Casey’s General Stores, Inc. ("Casey's" or the "Company")
(Nasdaq: CASY) one of the leading convenience store chains in the
United States, today announced financial results for the three and
six months ended October 31, 2023.
Second Quarter Key
Highlights
- Diluted EPS of $4.24, up 16% from the same period a year ago.
Net income was $159 million, up 15%, and EBITDA1 was $306 million,
up 13%, from the same period a year ago.
- Inside same-store sales increased 2.9% compared to prior year,
and 11.0% on a two-year stack basis, with an inside margin of
41.1%. Total inside gross profit increased 9.7% to $553.3 million
compared to the prior year.
- Same-store fuel gallons were flat (0.0%) compared to prior year
with a fuel margin of 42.3 cents per gallon. Total fuel gross
profit increased 8.6% to $308.8 million compared to the prior
year.
- Same-store operating expenses excluding credit card fees were
up 2.1%, favorably impacted by a 2% reduction in same-store labor
hours.
- Casey's built or acquired 59 stores in the quarter and recently
entered Texas, its 17th state, with a 22-store acquisition that
closed in November.
"Due to the hard work of our team, Casey's delivered an
outstanding second quarter highlighted by strong inside and fuel
gross profit growth,” said Darren Rebelez, Chairman, President and
CEO. “Inside same-store sales were driven by prepared food and
dispensed beverage, with whole pies and bakery performing
exceptionally well. Our fuel team continues to do an excellent job
finding the right balance between gallon growth and gross profit
margin, as evidenced by another strong fuel margin quarter while
same-store gallons were flat. The team continued to effectively
manage the stores by reducing same-store labor hours while growing
the business at the same time.”
Earnings
Three Months Ended October
31,
Six Months Ended October 31,
2023
2022
2023
2022
Net income (in thousands)
$
158,782
$
137,555
$
328,019
$
290,487
Diluted earnings per share
$
4.24
$
3.67
$
8.76
$
7.75
EBITDA (in thousands)
$
305,858
$
271,735
$
622,757
$
564,714
For the quarter, net income, diluted EPS, and EBITDA were up
compared to the same period a year ago primarily due to higher
profitability inside the store and higher fuel margin partially
offset by higher operating expenses due to operating 129 additional
stores.
____________________
1 EBITDA is reconciled to net income
below.
Inside
Three Months Ended October
31,
Six Months Ended October 31,
2023
2022
2023
2022
Inside sales (in thousands)
$
1,346,911
$
1,268,436
$
2,716,660
$
2,535,053
Inside same-store sales
2.9
%
7.9
%
4.2
%
7.0
%
Grocery and general merchandise same-store
sales
1.7
%
6.9
%
3.5
%
6.1
%
Prepared food and dispensed beverage
same-store sales
6.1
%
10.5
%
5.9
%
9.4
%
Inside gross profit (in thousands)
$
553,264
$
504,474
$
1,109,698
$
1,008,734
Inside margin
41.1
%
39.8
%
40.8
%
39.8
%
Grocery and general merchandise margin
34.0
%
33.3
%
34.0
%
33.6
%
Prepared food and dispensed beverage
margin
59.0
%
56.7
%
58.6
%
56.2
%
Total inside sales were up 6.2% for the quarter driven by strong
performance in the prepared food and dispensed beverage category,
including whole pizza pies, bakery, and dispensed beverages as well
as non-alcoholic and alcoholic beverages in the grocery and general
merchandise category. Inside margin was up 130 basis points
compared to the same quarter a year ago, primarily due to softening
of prepared food and dispensed beverage ingredient costs as well as
increased sales of private label products.
Fuel2
Three Months Ended October
31,
Six Months Ended October 31,
2023
2022
2023
2022
Fuel gallons sold (in thousands)
730,439
702,043
1,444,429
1,391,510
Same-store gallons sold
—
%
0.3
%
0.2
%
(1.2
)%
Fuel gross profit (in thousands)
$
308,835
$
284,407
$
605,813
$
592,595
Fuel margin (cents per gallon, excluding
credit card fees)
42.3
¢
40.5
¢
41.9
¢
42.6
¢
For the quarter, total fuel gallons sold increased 4.0% compared
to the prior year primarily due to the store count increase, while
same-store gallons were flat versus the prior year. The Company’s
total fuel gross profit was up 8.6% versus the prior year. The
Company sold $8.4 million in renewable fuel credits (RINs) in the
second quarter, a decrease of $2.7 million from the same quarter in
the prior year.
Operating Expenses
Three Months Ended October
31,
Six Months Ended October 31,
2023
2022
2023
2022
Operating expenses (in thousands)
$
579,703
$
539,207
$
1,140,558
$
1,082,478
Credit card fees (in thousands)
$
62,917
$
60,469
$
123,902
$
127,696
Same-store operating expenses excluding
credit card fees
2.1
%
1.3
%
2.6
%
1.9
%
Operating expenses increased 7.5% during the second quarter.
Over 3% of the increase is due to operating 129 more stores than
prior year. Total same-store employee expense contributed to 1% of
the increase, as the increase in labor rate was partially offset by
a reduction in same-store labor hours. The Company also incurred
higher variable incentive compensation, repair, maintenance, and
insurance expense that composed 2% of the increase.
____________________
2 Fuel category does not include wholesale
fuel activity, which is included in Other.
Expansion
Store Count
April 30, 2023
2,521
New store construction
13
Acquisitions
60
Acquisitions not opened
(5
)
Prior acquisitions opened
5
Closed
(2
)
October 31, 2023
2,592
Liquidity
At October 31, 2023, the Company had approximately $1.3 billion
in available liquidity, consisting of approximately $410 million in
cash and cash equivalents on hand and $900 million in available
borrowing capacity on existing lines of credit.
Share Repurchase
During the second quarter, the Company repurchased approximately
$30 million of shares. The Company has approximately $340 million
remaining under its existing share repurchase authorization.
Dividend
At its December meeting, the Board of Directors approved a
quarterly dividend of $0.43 per share. The dividend is payable
February 15, 2024, to shareholders of record on February 1,
2024.
Fiscal 2024 Outlook
As a result of the strong financial performance and unit growth
year-to-date, fiscal 2024 EBITDA growth is expected to be in-line
with the long-term strategic plan's goal of 8% to 10%. The Company
also expects to repurchase at least $100 million in shares
throughout the fiscal year. Same-store inside sales are expected to
increase 3.5% to 5%. Net interest expense is expected to be
approximately $53 million. The tax rate is now expected to be
approximately 23% to 25% for the year.
As discussed in the first quarter, the Company now expects to
add at least 150 stores in fiscal 2024, more than the originally
planned 110. As a result of this, total operating expenses are now
expected to increase approximately 6% to 8%, though same-store
operating expenses excluding credit card fees are expected to only
increase approximately 3% for the year. Depreciation and
amortization is now expected to be approximately $350 million for
the year.
The Company is not updating its outlook for the following
metrics. We expect inside margin improvement to approximately 40%
to 41%. The Company expects same-store fuel gallons sold to be
between negative 1% to positive 1%. The purchase of property and
equipment is expected to be $500 to $550 million.
Casey’s General Stores, Inc.
and Subsidiaries
Condensed Consolidated
Statements of Income
(Dollars in thousands, except
share and per share amounts)
(Unaudited)
Three Months Ended October
31,
Six Months Ended October 31,
2023
2022
2023
2022
Total revenue
$
4,064,400
$
3,978,575
$
7,933,651
$
8,433,219
Cost of goods sold (exclusive of
depreciation and amortization, shown separately below)
3,178,839
3,167,633
6,170,336
6,786,027
Operating expenses
579,703
539,207
1,140,558
1,082,478
Depreciation and amortization
85,598
78,117
168,503
154,412
Interest, net
12,306
13,502
24,801
27,318
Income before income taxes
207,954
180,116
429,453
382,984
Federal and state income taxes
49,172
42,561
101,434
92,497
Net income
$
158,782
$
137,555
$
328,019
$
290,487
Net income per common share
Basic
$
4.27
$
3.69
$
8.80
$
7.80
Diluted
$
4.24
$
3.67
$
8.76
$
7.75
Basic weighted average shares
37,227,932
37,277,080
37,264,442
37,250,580
Plus effect of stock compensation
203,143
246,679
187,811
215,335
Diluted weighted average shares
37,431,075
37,523,759
37,452,253
37,465,915
Casey’s General Stores, Inc.
and Subsidiaries
Condensed Consolidated Balance
Sheets
(Dollars in thousands)
(Unaudited)
October 31, 2023
April 30, 2023
Assets
Current assets
Cash and cash equivalents
$
409,891
$
378,869
Receivables
146,976
120,547
Inventories
418,901
376,085
Prepaid expenses
32,800
22,107
Income taxes receivable
2,142
23,347
Total current assets
1,010,710
920,955
Other assets, net of amortization
204,458
192,153
Goodwill
619,667
615,342
Property and equipment, net of accumulated
depreciation of $2,762,677 at October 31, 2023 and $2,620,149 at
April 30, 2023
4,392,626
4,214,820
Total assets
$
6,227,461
$
5,943,270
Liabilities and Shareholders’
Equity
Current liabilities
Current maturities of long-term debt and
finance lease obligations
$
53,166
$
52,861
Accounts payable
601,310
560,546
Accrued expenses
295,350
313,718
Total current liabilities
949,826
927,125
Long-term debt and finance lease
obligations, net of current maturities
1,596,786
1,620,513
Deferred income taxes
582,825
543,598
Insurance accruals, net of current
portion
34,064
32,312
Other long-term liabilities
166,569
159,056
Total liabilities
3,330,070
3,282,604
Total shareholders’ equity
2,897,391
2,660,666
Total liabilities and shareholders’
equity
$
6,227,461
$
5,943,270
Casey’s General Stores, Inc.
and Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Six months ended October 31,
2023
2022
Cash flows from operating activities:
Net income
$
328,019
$
290,487
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
168,503
154,412
Amortization of debt issuance costs
555
691
Change in excess replacement cost over
LIFO inventory valuation
7,946
16,927
Share-based compensation
19,485
25,875
(Gain) loss on disposal of assets and
impairment charges
(232
)
4,791
Deferred income taxes
39,353
25,284
Changes in assets and liabilities:
Receivables
(21,897
)
(49,463
)
Inventories
(44,714
)
(13,904
)
Prepaid expenses
(10,693
)
(9,875
)
Accounts payable
(10,400
)
(14,330
)
Accrued expenses
(20,925
)
6,224
Income taxes
21,992
46,707
Other, net
4,788
2,273
Net cash provided by operating
activities
481,780
486,099
Cash flows from investing activities:
Purchase of property and equipment
(175,955
)
(177,327
)
Payments for acquisition of businesses,
net of cash acquired
(139,359
)
(2,692
)
Proceeds from sales of assets
8,291
10,052
Net cash used in investing activities
(307,023
)
(169,967
)
Cash flows from financing activities:
Payments of long-term debt and finance
lease obligations
(35,135
)
(17,302
)
Payments of cash dividends
(30,988
)
(27,292
)
Repurchase of common stock
(59,491
)
—
Tax withholdings on employee share-based
awards
(18,121
)
(15,618
)
Net cash used in financing activities
(143,735
)
(60,212
)
Net increase in cash and cash
equivalents
31,022
255,920
Cash and cash equivalents at beginning of
the period
378,869
158,878
Cash and cash equivalents at end of the
period
$
409,891
$
414,798
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
INFORMATION
Six months ended October 31,
2023
2022
Cash paid during the period for:
Interest, net of amount capitalized
$
31,429
$
25,077
Income taxes, net
36,037
17,696
Noncash investing and financing
activities:
Purchased property and equipment in
accounts payable
78,684
59,236
Right-of-use assets obtained in exchange
for new finance lease liabilities
11,216
2,119
Right-of-use assets obtained in exchange
for new operating lease liabilities
8,273
1,163
Summary by Category
(Amounts in thousands)
Three months ended October 31,
2023
Prepared Food & Dispensed
Beverage
Grocery & General
Merchandise
Fuel
Other
Total
Revenue
$
382,481
$
964,430
$
2,646,478
$
71,011
$
4,064,400
Gross profit
$
225,664
$
327,600
$
308,835
$
23,462
$
885,561
59.0
%
34.0
%
11.7
%
33.0
%
21.8
%
Fuel gallons sold
730,439
Three months ended October 31, 2022
Revenue
$
351,260
$
917,176
$
2,635,920
$
74,219
$
3,978,575
Gross profit
$
199,224
$
305,250
$
284,407
$
22,061
$
810,942
56.7
%
33.3
%
10.8
%
29.7
%
20.4
%
Fuel gallons sold
702,043
Summary by Category
(Amounts in thousands)
Six months ended October 31,
2023
Prepared Food & Dispensed
Beverage
Grocery & General
Merchandise
Fuel
Other
Total
Revenue
$
755,294
$
1,961,366
$
5,073,811
$
143,180
$
7,933,651
Gross profit
$
442,525
$
667,173
$
605,813
$
47,804
$
1,763,315
58.6
%
34.0
%
11.9
%
33.4
%
22.2
%
Fuel gallons sold
1,444,429
Six months ended October 31, 2022
Revenue
$
694,813
$
1,840,240
$
5,732,262
$
165,904
$
8,433,219
Gross profit
$
390,177
$
618,557
$
592,595
$
45,863
$
1,647,192
56.2
%
33.6
%
10.3
%
27.6
%
19.5
%
Fuel gallons sold
1,391,510
Prepared Food & Dispensed
Beverage
Prepared Food & Dispensed
Beverage
Same-store Sales
Margin
Q1
Q2
Q3
Q4
Fiscal Year
Q1
Q2
Q3
Q4
Fiscal Year
F2024
5.9
%
6.1
%
F2024
58.2
%
59.0
%
F2023
8.4
10.5
5.0
%
4.9
%
7.1
%
F2023
55.6
56.7
57.3
%
56.8
%
56.6
%
F2022
10.8
4.1
7.4
7.6
7.4
F2022
61.0
60.6
58.0
56.9
59.2
Grocery & General
Merchandise
Grocery & General
Merchandise
Same-store Sales
Margin
Q1
Q2
Q3
Q4
Fiscal Year
Q1
Q2
Q3
Q4
Fiscal Year
F2024
5.2
%
1.7
%
F2024
34.1
%
34.0
%
F2023
5.5
6.9
5.8
%
7.1
%
6.3
%
F2023
33.9
33.3
34.0
%
33.0
%
33.6
%
F2022
7.0
6.8
7.7
4.3
6.3
F2022
33.0
33.3
32.0
32.5
32.7
Fuel Gallons
Fuel Margin
Same-store Sales
(Cents per gallon, excluding
credit card fees)
Q1
Q2
Q3
Q4
Fiscal Year
Q1
Q2
Q3
Q4
Fiscal Year
F2024
0.4
%
—
%
F2024
41.6
¢
42.3
¢
F2023
(2.3
)
0.3
(0.5
)%
—
%
(0.8
)%
F2023
44.7
40.5
40.7
¢
34.6
¢
40.2
¢
F2022
9.0
2.5
5.7
1.5
4.4
F2022
35.1
34.7
38.3
36.2
36.0
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED
EBITDA
We define EBITDA as net income before net interest expense,
income taxes, depreciation and amortization. Adjusted EBITDA
further adjusts EBITDA by excluding the gain or loss on disposal of
assets as well as impairment charges. Neither EBITDA nor Adjusted
EBITDA are considered GAAP measures, and should not be considered
as a substitute for net income, cash flows from operating
activities or other income or cash flow statement data. These
measures have limitations as analytical tools, and should not be
considered in isolation or as substitutes for analysis of our
results as reported under GAAP. We strongly encourage investors to
review our financial statements and publicly filed reports in their
entirety and not to rely on any single financial measure.
We believe EBITDA and Adjusted EBITDA are useful to investors in
evaluating our operating performance because securities analysts
and other interested parties use such calculations as a measure of
financial performance and debt service capabilities, and they are
regularly used by the Company for internal purposes including our
capital budgeting process, evaluating acquisition targets,
assessing performance, and awarding incentive compensation.
Because non-GAAP financial measures are not standardized, EBITDA
and Adjusted EBITDA, as defined by us, may not be comparable to
similarly titled measures reported by other companies. It therefore
may not be possible to compare our use of these non-GAAP financial
measures with those used by other companies.
The following table contains a reconciliation of net income to
EBITDA and Adjusted EBITDA for the three and six months ended
October 31, 2023 and 2022:
(in thousands)
Three Months Ended October
31,
Six Months Ended October 31,
2023
2022
2023
2022
Net income
$
158,782
$
137,555
$
328,019
$
290,487
Interest, net
12,306
13,502
24,801
27,318
Federal and state income taxes
49,172
42,561
101,434
92,497
Depreciation and amortization
85,598
78,117
168,503
154,412
EBITDA
305,858
271,735
622,757
564,714
Loss (gain) on disposal of assets and
impairment charges
1,216
4,561
(232
)
4,791
Adjusted EBITDA
$
307,074
$
276,296
$
622,525
$
569,505
NOTES:
- Gross Profit is defined as revenue less cost of goods sold
(exclusive of depreciation and amortization)
- Inside is defined as the combination of grocery and general
merchandise and prepared food and dispensed beverage
This release contains statements that may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including those related
to expectations for future periods, possible or assumed future
results of operations, financial conditions, liquidity and related
sources or needs, business and/or integration strategies, plans and
synergies, supply chain, growth opportunities, performance at our
stores. There are a number of known and unknown risks,
uncertainties, and other factors that may cause our actual results
to differ materially from any results expressed or implied by these
forward-looking statements, including but not limited to the
execution of our strategic plan, the integration and financial
performance of acquired stores, wholesale fuel, inventory and
ingredient costs, distribution challenges and disruptions, the
impact and duration of the conflict in Ukraine or other
geopolitical disruptions, as well as other risks, uncertainties and
factors which are described in the Company’s most recent annual
report on Form 10-K and quarterly reports on Form 10-Q, as filed
with the Securities and Exchange Commission and available on our
website. Any forward-looking statements contained in this release
represent our current views as of the date of this release with
respect to future events, and Casey’s disclaims any intention or
obligation to update or revise any forward-looking statements in
the release whether as a result of new information, future events,
or otherwise.
Corporate information is available at this website:
https://www.caseys.com. Earnings will be reported during a
conference call on December 11, 2023. The call will be broadcast
live over the Internet at 7:30 a.m. CST. To access the call, go to
the Events and Presentations section of our website at
https://investor.caseys.com/events-and-presentations/default.aspx.
No access code is required. A webcast replay of the call will
remain available in an archived format on the Events and
Presentations section of our website at
https://investor.caseys.com/events-and-presentations/default.aspx
for one year after the call.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231211838198/en/
Investor Relations Contact: Brian Johnson (515)
965-6587
Media Relations Contact: Katie Petru (515)
446-6772
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