Casey’s General Stores Q1 FY2025 Financial Results

Casey’s General Stores, Inc. (NASDAQ: CASY) has announced its first-quarter financial results for the fiscal year 2025, indicating steady progress in key financial metrics. The company reported diluted earnings per share (EPS) of $4.83, which is a 7% increase from the previous year.

Net income rose to $180 million, reflecting a 6% increase, while EBITDA increased to $346 million, a 9% improvement. Inside same-store sales grew by 2.3%, driven by strong performance in prepared foods, beverages, groceries, and general merchandise. Fuel same-store gallons sold experienced a slight rise of 0.7%, with a fuel margin of $0.407 per gallon.

Key Takeaways

• Diluted EPS increased by 7% to $4.83 per share.
• Net income and EBITDA rose by 6% and 9%, respectively.
• Inside same-store sales grew by 2.3%; fuel same-store gallons increased by 0.7%.
• Operating expenses on a same-store basis rose marginally by 0.7%.
• The company is acquiring Fikes, which includes 198 CEFCO convenience stores, expecting a pro forma leverage of about 2.4 times at closing.
• Total available liquidity stands at $1.2 billion, with a leverage ratio of 1.5 times.
• Free cash flow generated was $181 million, up from $160 million last year.
• Quarterly dividend maintained at $0.50 per share.
• Store growth forecasted at around 270 units for the fiscal year, aiming for a total of approximately 500 stores over three years.
• The closing of the Fikes acquisition is projected with a net purchase price of $980 million.
• The company plans to reduce pro forma leverage to approximately 2 times within a year following the acquisition.

Company Outlook

• Store growth is projected to be around 270 units for the fiscal year.
• The Fikes acquisition is anticipated to close with a net purchase price of $980 million.

Bearish Highlights

• Operating expenses on a same-store basis rose by 0.7%.
• Current cheese costs are unfavorable relative to the previous year.
• Soft traffic was noted, largely due to a decrease in lottery transactions.

Bullish Highlights

• Inside same-store and fuel same-store sales were in line with annual outlooks.
• Continuous improvement initiatives have cut same-store labor hours for nine consecutive quarters.
• The strategic plan focuses on unit growth and enhancing food business.

Misses

• Despite overall growth, the company faced tough comparisons due to a strong quarter last year.

Q&A Highlights

• The call addressed the performance of the Prepared Foods business, competition from quick-service restaurants, and same-store sales growth.
• Casey’s is expanding its private label offerings and has hedged about a quarter of cheese requirements.
• Wage rate inflation is at 3-4%, but improved turnover and job applications were noted.
• The Fikes acquisition, which includes a fuel terminal, was discussed regarding supply chain benefits.
• The Department of Labor’s overtime rule is expected to have minimal impact on the company.

Summary

Casey’s General Stores reported robust Q1 FY2025 earnings, including a 7% EPS increase, strong sales in food and beverages, and an upcoming acquisition expected to bolster growth.