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CASY’s Fiscal 1Q17 Results Miss on Top and Bottom Lines

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Snapshot

Iowa-based Casey’s General Stores (CASY) reported its financial results for fiscal 1Q17[1. quarter ended July 31, 2016] after the market closed on September 6, 2016. The company followed its results announcement with its quarterly earnings call on September 7, 2016.

Casey’s General Stores (CASY) reported fiscal 1Q17 earnings per share (or EPS) of $1.70, missing the Wall Street analysts’ estimates by $0.11, or 5.9%. Total revenue, which fell by 3.8% YoY (year-over-year) to $2.0 billion, also missed the consensus by $20 million. Casey’s stock slumped by 7.6% in after-hours trading after the earnings release.

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About Casey’s General Stores

Casey’s General Stores (CASY), along with its subsidiaries, operates 1,908 convenience stores in the US. The company sells fuel and a wide range of grocery items and prepared foods in 14 Midwestern states with a strong presence in Iowa, Missouri, and Illinois.

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

Casey’s General Stores comprises 1.2% of the portfolio holdings of the SPDR S&P Retail ETF (XRT).

Valuations update and stock recommendation

Casey’s General Stores is currently trading at a one-year forward price-to-earnings ratio of 21.8x, as compared to 28x, 15.1x, and 18.1x for CST Brands (CST), Murphy USA (MUSA), and Sunoco (SUN).[1. all information dated September 6, 2016]

The average 12-month price target by 25 analysts covering CASY is $143.80, indicating an upside of ~7.9% over the next one-year period.

CASY is covered by 13 Wall Street analysts. Of these, ten analysts have rated the company a “buy,” and three have recommended a “hold.”

Series overview

This series provides an earnings overview of Casey’s General Stores’ (CASY) fiscal 1Q17 results. We’ll evaluate CASY’s financial performance in the current quarter by discussing its key revenue drivers and margins.

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