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In Search of Anything to Be Pleased with about Casey’s 1Q Results

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A quick look at Casey’s 1Q17 results

For 1Q17, which ended July 31, 2016, Casey’s General Stores (CASY) reported a 3.8% decline in total sales to $2.0 billion. The company reported negative top-line growth for the seventh consecutive quarter.

Gasoline sales fell 10.8% YoY (year-over-year) during the quarter. In-store sales improved 8% YoY. However, this was the slowest growth for the company’s in-store sales in the last 13 quarters. Casey’s missed the Wall Street revenue estimates by $20 million.

Diluted earnings per share (or EPS) rose 8.3% YoY to $1.70 compared to $1.57 in 1Q16. Earnings, however, fell short of the average consensus estimate of $1.81 per share. Read the next part of this series to learn about the key reasons behind the earnings miss.

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Management’s comments

While talking about the company’s performance in 1Q17, Terry Handley, president and CEO of Casey’s, commented, “Fuel gross profit dollars increased 19.1% for the quarter as both same-store gallons and margin exceeded the goal.” He added, “We were pleased with the performance of our stores as gross profit dollars excluding fuel increased 6.7%, despite the recent weaknesses reported in the broader convenience and food service industries.”

Investors looking for exposure to Casey’s through ETFs can invest in the First Trust Consumer Staples AlphaDEX Fund (FXG). CASY makes up 3.4% of FXG.

Comparing Casey’s sales performance to peers

Casey’s convenience store peers have also reported weakness in sales over the past several quarters. CST Brands (CST) has witnessed a sales decline for the last eight quarters. Murphy USA (MUSA) has also seen negative top-line growth for 12 consecutive quarters.

Sunoco (SUN), one of the largest gasoline distribution companies in the US, has also seen negative sales growth in excess of 20% in the past two quarters.

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