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CASY Underperforms Wall Street’s Top Line Expectations in Fiscal 4Q17

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Jun. 8 2017, Updated 9:07 a.m. ET

Casey’s top line falls short of expectations yet again

Casey’s General Stores (CASY) reported its results for fiscal 4Q17[1. fiscal 4Q17 ended April 30, 2017] and fiscal 2017 on June 5, 2017. The company’s top line rose 16.6% YoY (year-over-year) to ~$1.9 billion, primarily driven by a 22% jump in the retail price of gasoline during the quarter compared to fiscal 4Q16. However, its top line missed Wall Street expectations by $29 million.

For fiscal 2017, CASY’s total sales increased 5.4% YoY to $7.5 billion. However, Casey’s General Store failed to meet expectations in all four quarters of 2017, due to the weakening performance of its Grocery and Merchandise segment and its Prepared Food and Fountain segment. Same-store sales of these two segments fell short of annual goals in all four quarters, driving the sales miss.

Terry Handley, president and CEO of Casey’s General Stores, noted that the company faced “downward pressure on customer traffic, which adversely impacted same-store sales across all of our categories.”

Handley added, “We believe this pressure is related to the agricultural economy in our marketing area, the growing spread between pricing of food away and food at home, as well as increased promotional activities of other competitors.”

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Comparing Casey’s LTM sales growth with its peers

Casey’s General Stores’ (CASY) top line expanded 5.4% over the last 12 months (or LTM). The company’s performance has been better than its convenience store peers.

CST Brands (CST) recorded LTM sales growth of 3.5%, and Murphy USA reported a 1.7% decline in LTM sales. Both companies have seen falling sales for the last four consecutive fiscal years.

Investors looking for exposure to Casey’s General Stores can consider the ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL), which invests ~2% of its holdings in the company.

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