What happened
Shares of Casey’s General Stores (NASDAQ: CASY) rose 11.1% as of 2:30 PM ET on Tuesday after the supermarket chain’s fiscal first quarter 2024 results easily beat expectations.
To be clear, Casey’s most important numbers were technically mixed, compared to Wall Street consensus estimates. For the period ending July 31, revenue fell 13.1% year over year to $3.87 billion, slightly below the average estimate of $3.91 billion. But in the end, Casey’s earnings rose 9.5% year over year to $4.52 per share, crushing analyst expectations for earnings of $3.37 per share.
So
Casey’s chairman and CEO Darren Rebelez called it a “great start” as the company embarks on a new three-year strategic plan unveiled in June. That plan specifically includes a goal to add 350 stores to the current base of just over 2,500 by the end of fiscal 2026, expand private label food offerings and improve operational efficiencies to achieve annual EBITDA achieve growth of 8% to 10%.
“With a more normalized macroeconomic environment in the quarter, the strength of Casey’s unique business model was on full display,” Rebelez added.
Casey’s same-store sales grew 5.4% year over year, largely due to strong sales of whole pizza pies and the launch of its new thin crust pizza. The company’s same-store fuel gallons also increased 0.4% year over year, with a fuel margin of 41.6 cents per gallon. In addition, Casey’s has entered into agreements to acquire 125 new stores, including 63 from a previously announced deal with supermarket peer EG Group.
What now
As such, Casey’s now expects to add at least 150 stores in fiscal 2024, up from its previous target of 110.
Casey’s simultaneously reiterated its previous guidance calling for same-store sales growth of 3% to 5% for the fiscal year, with internal margins improving to a range of 40% to 41%, and fuel gallons sold in the same store would gain momentum. range from 1% down to 1% up.
Ultimately, this was by no means a perfect report from Casey’s as the company works toward the goals set out in the new strategic plan. But it was a solid report that showed notable improvements in operating efficiency and earnings power. Unsurprisingly, shares of Casey’s General Stores are soaring in response.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends Casey’s General Stores. The Motley Fool has a disclosure policy.
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