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Casey’s Top-Line Slide Continued in Fiscal 2Q17

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Casey’s top line fell again

As we saw in Part 1 of this series, Casey’s General Stores (CASY) reported results for fiscal 2Q17 on December 7, 2016. It reported a fall in its top line for the eighth consecutive quarter.

Sales fell 0.20% YoY (year-over-year) to $1.9 billion, missing the consensus by $20.0 million. The fall was a result of a 4.6% YoY fall in gasoline sales, which offset a 4.7% rise in in-store sales.

Casey’s convenience store peers have also reported sales weaknesses over the past several quarters. The top lines of CST Brands (CST) and Murphy USA (MUSA) have fallen for the past seven and 15 consecutive quarters, respectively. Mass merchandiser Target (TGT) has also reported a fall in sales for the last four quarters.

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EPS missed expectations

Casey’s adjusted EPS (earnings per share) fell a massive 28.0% YoY to $1.44, missing the consensus by 15.0 cents, or 9.0%. The fall was primarily a result of lower fuel margins.

Terry Handley, Casey’s president and CEO (chief executive officer), said, “The second quarter fuel margin was 6.1 cents per gallon lower than the 24.7 cents per gallon record quarterly fuel margin from a year ago, which impacted the second quarter diluted earnings by approximately $0.52 per share.”

He added, “For the second quarter, gross profit dollars excluding fuel were up 7.5% and total fuel gallons sold increased 7.1%. Given the ongoing challenges in the broader convenience and food service industries, we are pleased with the performance of our stores.”

If you’re looking for exposure to Casey’s through ETFs, you can invest in the First Trust Consumer Staples AlphaDEX ETF (FXG). CASY makes up 1.7% of FXG.

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