S&P 500   4,397.94 (-1.89%)
DOW   34,265.37 (-1.30%)
QQQ   351.69 (-2.77%)
AAPL   162.41 (-1.28%)
MSFT   296.03 (-1.85%)
FB   303.17 (-4.23%)
GOOGL   2,607.03 (-2.22%)
AMZN   2,852.86 (-5.95%)
TSLA   943.90 (-5.26%)
NVDA   233.74 (-3.21%)
BABA   123.23 (-5.95%)
NIO   27.35 (-6.11%)
AMD   118.81 (-2.53%)
CGC   7.29 (-3.57%)
MU   81.93 (-3.69%)
GE   96.30 (-1.98%)
T   26.61 (-1.52%)
F   20.65 (-4.62%)
DIS   137.38 (-6.94%)
AMC   17.97 (-0.55%)
PFE   52.79 (-2.33%)
ACB   4.46 (-6.11%)
BA   205.44 (-4.09%)
S&P 500   4,397.94 (-1.89%)
DOW   34,265.37 (-1.30%)
QQQ   351.69 (-2.77%)
AAPL   162.41 (-1.28%)
MSFT   296.03 (-1.85%)
FB   303.17 (-4.23%)
GOOGL   2,607.03 (-2.22%)
AMZN   2,852.86 (-5.95%)
TSLA   943.90 (-5.26%)
NVDA   233.74 (-3.21%)
BABA   123.23 (-5.95%)
NIO   27.35 (-6.11%)
AMD   118.81 (-2.53%)
CGC   7.29 (-3.57%)
MU   81.93 (-3.69%)
GE   96.30 (-1.98%)
T   26.61 (-1.52%)
F   20.65 (-4.62%)
DIS   137.38 (-6.94%)
AMC   17.97 (-0.55%)
PFE   52.79 (-2.33%)
ACB   4.46 (-6.11%)
BA   205.44 (-4.09%)
S&P 500   4,397.94 (-1.89%)
DOW   34,265.37 (-1.30%)
QQQ   351.69 (-2.77%)
AAPL   162.41 (-1.28%)
MSFT   296.03 (-1.85%)
FB   303.17 (-4.23%)
GOOGL   2,607.03 (-2.22%)
AMZN   2,852.86 (-5.95%)
TSLA   943.90 (-5.26%)
NVDA   233.74 (-3.21%)
BABA   123.23 (-5.95%)
NIO   27.35 (-6.11%)
AMD   118.81 (-2.53%)
CGC   7.29 (-3.57%)
MU   81.93 (-3.69%)
GE   96.30 (-1.98%)
T   26.61 (-1.52%)
F   20.65 (-4.62%)
DIS   137.38 (-6.94%)
AMC   17.97 (-0.55%)
PFE   52.79 (-2.33%)
ACB   4.46 (-6.11%)
BA   205.44 (-4.09%)
S&P 500   4,397.94 (-1.89%)
DOW   34,265.37 (-1.30%)
QQQ   351.69 (-2.77%)
AAPL   162.41 (-1.28%)
MSFT   296.03 (-1.85%)
FB   303.17 (-4.23%)
GOOGL   2,607.03 (-2.22%)
AMZN   2,852.86 (-5.95%)
TSLA   943.90 (-5.26%)
NVDA   233.74 (-3.21%)
BABA   123.23 (-5.95%)
NIO   27.35 (-6.11%)
AMD   118.81 (-2.53%)
CGC   7.29 (-3.57%)
MU   81.93 (-3.69%)
GE   96.30 (-1.98%)
T   26.61 (-1.52%)
F   20.65 (-4.62%)
DIS   137.38 (-6.94%)
AMC   17.97 (-0.55%)
PFE   52.79 (-2.33%)
ACB   4.46 (-6.11%)
BA   205.44 (-4.09%)

Growing Pains Cut Into Casey’s General Stores, Inc Profits

Wednesday, December 8, 2021 | Thomas Hughes
Growing Pains Cut Into Casey’s General Stores, Inc Profits

Inflation Takes A Bite Out Of Casey’s General Stores 

Casey’s General Stores, Inc (NASDAQ: CASY) is a solid post-pandemic play and steady growth story and nothing has changed about that. If anything, Casey’s is growing a wee bit faster than expected but there is a problem, at least a small one. The impact of acquisitions compounded by inflation has cut into the bottom line. While revenue is outpacing consensus margins are slipping and operating costs are on the rise. The good news is that, once acquisitions are absorbed, operating costs will come down and margins will likely improve. What this means for us today is the chance to get into this great stock at some of the lowest prices all year. 

Mixed Results Send Casey’s General Stores, Inc Lower 

Casey’s had a good quarter but we have one of those situations where the market was expecting more than what it got. The company reported $3.26 billion in net consolidated revenue for a gain of 46.8% over last year. This is against an easy comp and does include acquisitional gains but is strong nonetheless. The problems begin with the analyst’s expectations which were basically in line with the results. The net revenue beat the Marketbeat.com consensus by 95 basis points but this is a small margin in light of retail strength in other sectors. 

On a segment basis Inside comp-store sales increased by 6% versus last year’s strong gains. Gross profit increased by 12.3% due to acquisitions but the strength was offset by a 30 basis point decline in margin. Within that, grocery and merchandise sales rose 6.8% while prepared foods and beverages grew a slower 4.1%. Prepared foods and beverages were impaired by supply chain disruption and product availability and are the reason for most of the margin decline. Fuel gallons posted a 2.5% comp with a $0.347 per gallon margin. That’s down $0.006 per gallon but resulted in a 13.6% increase in gross profit due to acquisitions. 

Moving down, operating expenses increased by 22% on a combination of factors that include an increased store count, higher wages, increased CC fees, and increased depreciation related to the higher store count. This resulted in GAAP EPS of $2.59 versus the $2.91 expected by the Marketbeat.com consensus estimate. So, while revenue is growing and growth is projected for the future, growing pains and inflation are digging into the profits. 

Casey’s Is Growing, Growing Growing 

Casey’s added 137 new stores over the course of the last quarter and is expecting to add another 100 or so by the end of the fiscal year. This includes a recently announced purchase of 40 Pilot stores in the eastern Tennessee region and we expect to hear of more acquisitions in the coming quarter. The company is planning to build a new store as well but has cut back on those plans due to the increase in acquisitions. As for the balance sheet, Casey’s is using some debt to help finance the growth and is carrying a bit of leverage at roughly 10X FCF. The upshot is that coverage remains strong and growth is good.

The Technical Outlook: Casey’s Falls To Support 

Shares of Casey’s are down more than 6% in premarket trading and near the bottom of their recent range. There is a risk of lower prices but support appears to be strong at the $185 level. If price action falls below there we would expect to see bargain hunters scooping up the shares. If not price action could fall to $180 or lower. Assuming support holds at or above $185, we see Casey’s moving sideways within the range of $185 to $200 and possibly as high as $220 in the near to mid-term. Longer-term we would expect to see shares of Casey’s General Stores move up to set new highs above $220. 

Growing Pains Cut Into Casey’s General Stores, Inc Profits

Should you invest $1,000 in Casey's General Stores right now?

Before you consider Casey's General Stores, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Casey's General Stores wasn't on the list.

While Casey's General Stores currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here

 


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Casey's General Stores (CASY)2.8$181.17-1.9%0.77%22.82Buy$233.50
Compare These Stocks  Add These Stocks to My Watchlist 

Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.