Why Casey’s Delivered an Earnings Miss in Fiscal 4Q16



Snapshot of the series

Iowa-based Casey’s General Stores (CASY) reported its financial results for fiscal 4Q16 after the Market closed on June 6, 2016. The results announcement was followed by the company’s quarterly earnings call on June 7.

Casey’s beat consensus revenue estimates by $10 million in the quarter, reporting total sales of $1.6 billion. The company, however, missed its consensus average earnings estimate by $0.03 per share, reporting earnings of $1.19 per share. This earnings miss can be attributed to a shortfall in the company’s double-digit comps growth in its prepared foods business.

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About Casey’s General Stores

Casey’s General Stores and its subsidiaries operate 1,908 convenience stores in the United States. The company sells fuel and a wide range of grocery items and prepared foods. The company has operations in 14 Midwestern states, with strong presences in Iowa (505 stores), Missouri (326), and Illinois (422).

The company’s stores are mostly located in small towns and areas with low population densities. Approximately 57% of the company’s store locations have populations of fewer than 5,000 people. By focusing its operations on smaller towns, the company is able to avoid competition from bigger convenience stores and supermarkets such as CST Brands (CST), Murphy USA (MUSA), 7-Eleven, and Kroger (KR).

Investors looking for exposure to Casey’s can invest in the iShares Russell 2000 Growth ETF (IWO), which has around 0.55% of its holdings invested in the company.

Aim of the series

In this series, we’ll discuss Casey’s financial performance in 4Q16, the performances of each of its revenue categories, its stock market performance, and its valuation compared to its peers’. Let’s start with CASY’s financial results in the next article.


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