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1Q18 Earnings Preview: Can Casey's Beat Expectations This Time?

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Part 2
1Q18 Earnings Preview: Can Casey's Beat Expectations This Time? PART 2 OF 4

How Casey’s Top Line Looks Ahead of Its 1Q18 Results

Casey’s sales to expand 9% during 1Q18

As discussed, Casey’s General Stores (CASY) will be reporting its 1Q18 results on September 6, 2017. The company’s top line is projected to grow 9.5% year-over-year (or YoY) to $2.2 billion in the first quarter.

How Casey&#8217;s Top Line Looks Ahead of Its 1Q18 Results

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During fiscal 2017, the company’s total sales rose 5.4% YoY to $7.5 billion. Casey’s failed to meet expectations in all four quarters of 2017.

The company’s Prepared Food and Fountain category and Grocery and Merchandise category, which missed targets in all four quarters of fiscal 2017, were broadly responsible for the company’s top-line miss.

Fuel margins to improve in fiscal 2018

The company’s gasoline segment, which accounted for 59% of its top line, beat the target for same-store sales and margins during fiscal 2017. Same-store gallons rose 2.1%, versus a goal of 2%. The average margin stood at 18.4 cents, in line with the annual goal. Management expects fiscal 2018 same-store gallons to grow 1%–2%. Margins are likely to be better than in the previous year, at 18%–20%. Investors looking for exposure to Casey’s can invest in the ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL), which invests ~2.3% of its holdings in the company.

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