Why Casey’s Earnings Rose despite Lower Sales in Fiscal 2015



Fiscal 2015 revenue fell on lower fuel prices

Casey’s General Stores’ (CASY) fiscal 2015 total revenue stood at $7.7 billion, registering a 0.9% YoY (year-over-year) fall, primarily on account of lower fuel prices.

Falling fuel prices pulled down retail fuel sales by 7.4%. They stood at $5.1 billion at the end of fiscal 2015. However, gallons sold rose by 9.1% during the year.

Inside sales rose 14.9% to $2.6 billion. New stores (built or acquired) resulted in around 67% of this increase, while the company’s new initiatives (expanded hours at select locations, stores with pizza delivery, and major remodels) accounted for 33% of this increase.

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Margins remained strong during fiscal 2015

Casey’s total gross profit margin rose to 18.5% in fiscal 2015, compared to 15.6% in the previous fiscal year. Fuel margins stood at a record-breaking 6.8% (from 4.8% in fiscal 2014), primarily due to a steady fall in wholesale costs. The company’s Grocery & Merchandise margin, however, stayed flat at 32.1%, while its Prepared Food & Fountain margin fell to 59.7% in fiscal 2015 from 61.1% in the previous year.

Net income registered a 42% rise

As a result of a strong gross margin in the Fuel category, CASY’s net income for fiscal 2015 rose by 42% and stood at $180 million. Its net margin stood at 2.3% compared to 1.6% in fiscal 2014. Comparing Casey’s profitability with those of its peers, Casey’s trailing-12-month net margin stood at 3.1%, higher than CST Brands’ (CST) 1.3%, Murphy USA’s (MUSA) 1.4%, Sunoco’s (SUN) 0.87%, and Kroger’s (KR) 1.6%.

Investors looking for exposure to Casey’s can invest in the iShares Russell 2000 Growth ETF (IWO), which has around 0.53% of its holdings invested in the company.

Read the next section to know about the company’s performance in its last-reported quarter.


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