A Look at Casey’s General Store’s Fiscal 2018 Guidance



Earnings per share fall short of expectations

Casey’s General Stores (CASY), which reported its fiscal 4Q17 results on June 5, missed Wall Street earnings expectations for the fourth straight quarter in fiscal 2017.

The company’s earnings declined 36% during fiscal 4Q17 to $0.76 per share, which is $0.09 short of consensus. As we discussed earlier in this series, the company fell short of its margin goals for all three product categories. For fiscal 2017, its diluted earnings per share (or EPS) were down 22% to $4.48.

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Operating expenses

CASY’s fiscal 4Q17 operating expenses increased 11.4% to $292.6 million, primarily due to a rise in wages and payroll taxes. For fiscal 2017, its operating expenses rose 11.2%.

Terry Handley, the president and CEO of Casey’s General Stores, noted, “Both the year-to-date and fourth quarter increases were primarily attributable to increases in employee-related costs from operating more stores compared to the same periods a year ago, along with the various growth programs impacting our existing stores.”

Fiscal 2018 guidance

Casey’s General Stores’ (CASY) management also provided its guidance for fiscal 2018 along with its fiscal 4Q17 results. Key highlights from the company’s guidance follow:

Sales comps:

  • Gasoline segment: 1%–2%
  • Grocery and Other Merchandise segment: 2%–4%
  • Prepared Food and Fountain segment: 5.0%–7.0%

Average margins:

  • Gasoline segment: 18%–20%
  • Grocery and Other Merchandise segment: 31%–32%
  • Prepared Food and Fountain segment: 61.5%–62.5%

CASY’s operating expenses are expected to increase 9%–11%.

Investors looking for exposure to Casey’s through ETFs can invest in the iShares Edge MSCI Min Vol USA Small-Cap ETF (SMMV). CASY makes up 0.73% of the ETF.


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