ANKENY, Iowa--(BUSINESS WIRE)--Casey’s General Stores, Inc. (Nasdaq: CASY) today reported diluted earnings per share of $1.28 for the second quarter of fiscal 2018 ended October 31, 2017, compared to $1.44 per share for the same quarter a year ago. "The Company surpassed the 2,000 store milestone and now has 200 new-store sites either under agreement or under construction at the end of the quarter, including its first store in the state of Michigan," said Terry Handley, President and Chief Executive Officer. "In addition, we recently began the consultation phase of our digital engagement and price optimization projects. We continue to make investments to enhance ongoing operations and support our long-term vision to create shareholder value."
Fuel - The Company's fiscal 2018 guidance was to increase same-store gallons sold 1.0% to 2.0% with an average margin of 18.0 to 20.0 cents per gallon. For the quarter, same-store gallons sold were up 1.9% with an average margin of 19.7 cents per gallon. "The Company is an industry leader in same-store gallons sold, and continues to gain market share in this category," said Handley. "Further, our fuel pricing strategy positioned us to take advantage of market volatility throughout the quarter to realize a fuel margin near the top end of our guidance." The Company sold 17.3 million renewable fuel credits for $14.5 million during the second quarter. Total gallons sold for the quarter were up 5.7% to 561.7 million gallons while gross profit dollars increased 11.7% to $110.7 million. Year to date, same-store gallons sold were up 1.8% with an average margin of 19.5 cents per gallon.
Grocery and Other Merchandise - The Company's fiscal 2018 guidance was to increase same-store sales 2.0% to 4.0% with an average margin of 31.0% to 32.0%. For the quarter, same-store sales were up 2.5% with an average margin of 32.0%. "Both the quarter and year-to-date same-store sales and average margin was within our annual performance guidance," stated Handley. "We continue to gain market share in this category." For the first quarter, total grocery and other merchandise revenue increased 5.0% to $572.2 million, and gross profit dollars were up 4.9% to $183.1 million. Year to date, same-store sales were up 2.8% with an average margin of 31.9%. Total revenue for the first six months was up 5.3% to $1.2 billion while total gross profit dollars increased 5.6% to $373.5 million.
Prepared Food and Fountain - The fiscal 2018 guidance was to increase same-store sales 4.0% to 6.0% with an average margin of 61.5% to 62.5%. Same-store sales for the quarter were up 2.1% with an average margin of 61.3%. "Softer traffic in the back half of the quarter affected overall results in the category," said Handley. Total prepared food and fountain revenue increased 5.5% to $262.0 million in the second quarter while gross profit dollars grew 2.7% to $160.5 million. Year to date, total prepared food and fountain revenue was up 6.5% to $523.8 million, and total gross profit dollars were up 4.8% to $324.2 million. For the first six months, same-store sales were up 2.9% with an average margin of 61.9%.
Operating Expenses - Casey's fiscal 2018 guidance was a 9.0% to 11.0% increase in total operating expenses. For the second quarter, total operating expenses increased 9.4% to $322.9 million. Year to date, total operating expenses increased 9.7% to $644.2 million. Both quarter-to-date and year-to-date increases were driven by increases in employee-related costs from operating more stores and implementing growth programs in more stores compared to the same time periods last year. In addition, credit card fees and fuel expenses combined were up $4.1 million for the quarter, primarily due to higher fuel prices. Store level operating expenses for open stores not impacted by recent growth programs were up 3.7% for the quarter. "We're encouraged by the numerous steps we've taken to further control overall cost increases and will continue to look for additional ways to drive efficiencies in this area going forward," added Handley.
Expansion - The Company's fiscal 2018 guidance was to build or acquire 90 to 120 stores, replace 30 existing locations, and complete 75 major remodels. At the end of the second quarter, the Company had built and opened 12 new stores, acquired 14 stores, completed 14 replacements, and remodeled 28 stores. In addition, there were 66 new stores, 18 replacement stores, and 14 major remodel stores under construction. Finally, the Company had 134 sites under agreement for new store construction and 16 acquisition stores under agreement to purchase. "The acquisition pipeline continues to expand, which further complements the accelerated growth in our new store construction activity," said Handley. "The Company is positioned well to take advantage of a consolidating market and drive unit growth at faster levels than we have in the past."
Share Repurchase Program - During the second quarter of fiscal 2018, the Company repurchased 510,193 shares of its common stock under its open market share repurchase program for approximately $55.3 million, or an average price of $108.41 per share. As of October 31, 2017, the Company had a total remaining authorized amount for share repurchases of $117.4 million.
Dividend - At its December meeting, the Board of Directors declared a quarterly dividend of $0.26 per share. The dividend is payable February 15, 2018 to shareholders of record on February 1, 2018.
Fiscal 2018 Guidance - Based on the softer traffic experienced in the second quarter, the Company is revising its prepared food and fountain same-store sales guidance to 2.0% to 4.0% from 4.0% to 6.0%. There were no other changes to the fiscal 2018 guidance. Below is a summary of the previous and current fiscal 2018 guidance:
| Same-store Sales | Average Margin | |||||||
| Previous | Current | Previous | Current | |||||
| Fuel (Gallons and CPG) | 1.0 - 2.0% | 1.0 - 2.0% | 18.0 - 20.0 | 18.0 - 20.0 | ||||
| Grocery and Other Merchandise | 2.0 - 4.0% | 2.0 - 4.0% | 31.0 - 32.0% | 31.0 - 32.0% | ||||
| Prepared Food and Fountain | 4.0 - 6.0% | 2.0 - 4.0% | 61.5 - 62.5% | 61.5 - 62.5% | ||||
| Previous | Current | |||||||
| Operating Expenses | 9.0 - 11.0% | 9.0 - 11.0% | ||||||
| Depreciation and Amortization | 13.0 - 15.0% | 13.0 - 15.0% | ||||||
| Build or Acquire | 90 - 120 stores | 90 - 120 stores | ||||||
| Replacements | 30 stores | 30 stores | ||||||
| Major Remodels | 75 stores | 75 stores | ||||||
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Casey’s General Stores, Inc. |
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|
Three Months Ended October 31, |
Six Months Ended October 31, |
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| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Total revenue | $ | 2,153,745 | $ | 1,920,055 | $ | 4,247,484 | $ | 3,890,134 | ||||||||
| Cost of goods sold (exclusive of depreciation and amortization, shown separately below) | 1,686,088 | 1,476,537 | 3,303,130 | 2,996,821 | ||||||||||||
| Operating expenses | 322,949 | 295,289 | 644,196 | 587,417 | ||||||||||||
| Depreciation and amortization | 54,157 | 48,675 | 106,526 | 94,530 | ||||||||||||
| Interest, net | 12,976 | 10,075 | 24,351 | 20,615 | ||||||||||||
| Income before income taxes | 77,575 | 89,479 | 169,281 | 190,751 | ||||||||||||
| Federal and state income taxes | 28,657 | 32,299 | 63,605 | 66,179 | ||||||||||||
| Net income | $ | 48,918 | $ | 57,180 | $ | 105,676 | $ | 124,572 | ||||||||
| Net income per common share | ||||||||||||||||
| Basic | $ | 1.29 | $ | 1.46 | $ | 2.77 | $ | 3.18 | ||||||||
| Diluted | $ | 1.28 | $ | 1.44 | $ | 2.75 | $ | 3.14 | ||||||||
| Basic weighted average shares | 37,804,649 | 39,189,804 | 38,108,105 | 39,177,746 | ||||||||||||
| Plus effect of stock compensation | 378,950 | 472,735 | 379,802 | 472,713 | ||||||||||||
| Diluted weighted average shares | 38,183,599 | 39,662,539 | 38,487,907 | 39,650,459 | ||||||||||||
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Casey’s General Stores, Inc. |
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| October 31, 2017 | April 30, 2017 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 285,185 | $ | 76,717 | ||||
| Receivables | 42,498 | 43,244 | ||||||
| Inventories | 241,681 | 201,644 | ||||||
| Prepaid expenses | 6,767 | 9,179 | ||||||
| Income tax receivable | 97 | 19,901 | ||||||
| Total current assets | 576,228 | 350,685 | ||||||
| Other assets, net of amortization | 24,466 | 23,453 | ||||||
| Goodwill | 137,319 | 132,806 | ||||||
| Property and equipment, net of accumulated depreciation of $1,542,953 at October 31, 2017 and $1,496,472 at April 30, 2017 | 2,682,169 | 2,513,158 | ||||||
| Total assets | $ | 3,420,182 | $ | 3,020,102 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Notes payable to bank | $ | — | $ | 900 | ||||
| Current maturities of long-term debt | 15,434 | 15,421 | ||||||
| Accounts payable | 307,110 | 293,903 | ||||||
| Accrued expenses | 145,085 | 136,322 | ||||||
| Total current liabilities | 467,629 | 446,546 | ||||||
| Long-term debt, net of current maturities | 1,299,626 | 907,356 | ||||||
| Deferred income taxes | 461,667 | 440,124 | ||||||
| Deferred compensation | 16,102 | 15,784 | ||||||
| Other long-term liabilities | 20,826 | 19,672 | ||||||
| Total liabilities | 2,265,850 | 1,829,482 | ||||||
| Total shareholders’ equity | 1,154,332 | 1,190,620 | ||||||
| Total liabilities and shareholders’ equity | $ | 3,420,182 | $ | 3,020,102 | ||||
Certain statements in this news release, including any discussion of management expectations for future periods, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from future results expressed or implied by those statements. Casey’s disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.
| Summary by Category (Amounts in thousands) | ||||||||||||||||||||
| Three months ended 10/31/2017 | Fuel |
Grocery & Other |
Prepared Food |
Other | Total | |||||||||||||||
| Revenue | $ | 1,306,246 | $ | 572,151 | $ | 261,998 | $ | 13,350 | $ | 2,153,745 | ||||||||||
| Revenue less cost of goods sold (exclusive of depreciation and amortization) | $ | 110,686 | $ | 183,133 | $ | 160,510 | $ | 13,328 | $ | 467,657 | ||||||||||
| 8.5 | % | 32.0 | % | 61.3 | % | 99.8 | % | 21.7 | % | |||||||||||
| Fuel gallons | 561,692 | |||||||||||||||||||
| Three months ended 10/31/2016 | ||||||||||||||||||||
| Revenue | $ | 1,113,351 | $ | 544,799 | $ | 248,345 | $ | 13,560 | $ | 1,920,055 | ||||||||||
| Revenue less cost of goods sold (exclusive of depreciation and amortization) | $ | 99,060 | $ | 174,590 | $ | 156,329 | $ | 13,539 | $ | 443,518 | ||||||||||
| 8.9 | % | 32.0 | % | 62.9 | % | 99.8 | % | 23.1 | % | |||||||||||
| Fuel gallons | 531,216 | |||||||||||||||||||
| Summary by Category (Amounts in thousands) | ||||||||||||||||||||
| Six months ended 10/31/2017 | Fuel |
Grocery & Other |
Prepared Food |
Other | Total | |||||||||||||||
| Revenue | $ | 2,527,231 | $ | 1,169,565 | $ | 523,838 | $ | 26,850 | $ | 4,247,484 | ||||||||||
| Revenue less cost of goods sold (exclusive of depreciation and amortization) | $ | 219,898 | $ | 373,497 | $ | 324,155 | $ | 26,804 | $ | 944,354 | ||||||||||
| 8.7 | % | 31.9 | % | 61.9 | % | 99.8 | % | 22.2 | % | |||||||||||
| Fuel gallons | 1,126,739 | |||||||||||||||||||
| Six months ended 10/31/2016 | ||||||||||||||||||||
| Revenue | $ | 2,260,395 | $ | 1,110,973 | $ | 492,001 | $ | 26,765 | $ | 3,890,134 | ||||||||||
| Revenue less cost of goods sold (exclusive of depreciation and amortization) | $ | 203,489 | $ | 353,717 | $ | 309,381 | $ | 26,726 | $ | 893,313 | ||||||||||
| 9.0 | % | 31.8 | % | 62.9 | % | 99.9 | % | 23.0 | % | |||||||||||
| Fuel gallons | 1,067,180 | |||||||||||||||||||
| Fuel Gallons | Fuel Margin | ||||||||||||||||||||||||||||||||
| Same-store Sales | (Cents per gallon, excluding credit card fees) | ||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 |
Fiscal |
Q1 | Q2 | Q3 | Q4 |
Fiscal |
||||||||||||||||||||||||
| F2018 | 1.7 | % | 1.9 | % | F2018 |
19.3 |
¢ |
19.7 |
¢ |
||||||||||||||||||||||||
| F2017 | 3.1 | 3.7 | 2.6 | % | (0.5 | )% | 2.1 | % | F2017 | 19.5 | 18.6 |
17.9 |
¢ |
17.2 |
¢ |
18.4 |
¢ |
||||||||||||||||
| F2016 | 3.4 | 3.3 | 1.6 | 4.6 | 3.0 | F2016 | 17.5 | 24.7 | 18.1 | 17.8 | 19.6 | ||||||||||||||||||||||
| Grocery & Other Merchandise | Grocery & Other Merchandise | ||||||||||||||||||||||||||||||||
| Same-store Sales | Margin | ||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 |
Fiscal |
Q1 | Q2 | Q3 | Q4 |
Fiscal |
||||||||||||||||||||||||
| F2018 | 3.1 | % | 2.5 | % | F2018 | 31.9 | % | 32.0 | % | ||||||||||||||||||||||||
| F2017 | 4.7 | 3.1 | 3.0 | % | 1.5 | % | 2.9 | % | F2017 | 31.6 | 32.0 | 31.1 | % | 31.1 | % | 31.5 | % | ||||||||||||||||
| F2016 | 7.7 | 6.6 | 7.7 | 9.7 | 7.8 | F2016 | 32.6 | 31.5 | 31.2 | 32.1 | 31.9 | ||||||||||||||||||||||
| Prepared Food & Fountain | Prepared Food & Fountain | ||||||||||||||||||||||||||||||||
| Same-store Sales | Margin | ||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 |
Fiscal |
Q1 | Q2 | Q3 | Q4 |
Fiscal |
||||||||||||||||||||||||
| F2018 | 3.7 | % | 2.1 | % | F2018 | 62.5 | % | 61.3 | % | ||||||||||||||||||||||||
| F2017 | 5.1 | 5.1 | 5.8 | % | 3.2 | % | 4.8 | % | F2017 | 62.8 | 62.9 | 61.7 | % | 61.7 | % | 62.3 | % | ||||||||||||||||
| F2016 | 10.3 | 9.4 | 6.0 | 8.2 | 8.4 | F2016 | 62.5 | 63.4 | 62.0 | 61.9 | 62.5 | ||||||||||||||||||||||
Corporate information is available at this Web site: http://www.caseys.com. Earnings will be reported during a conference call on December 12, 2017. The call will be broadcast live over the Internet at 9:30 a.m. CST via the Press and Documents section of our Web site and will be available in an archived format.
