A robust Q4 earnings beat, solid revenue growth, and promising FY25 guidance have propelled Casey's General Stores (CASY, Financial) to new all-time highs, with shares up 17%. The company also announced a 16% increase in its quarterly dividend to $0.50 per share. CASY's performance has been impressive, with shares gaining over 70% in the past year, showcasing its competitive advantages and strong management.
- CASY reported EPS of $2.34, a 57% year-over-year increase, on revenues of $3.6 billion, up 8% from the prior year. Inside same-store sales grew by 5.6%, ending the year at 4.4%, within the company's forecast range of 3.5-5.0%.
- Prepared foods, a key differentiator for CASY, saw a 14% year-over-year increase (8.8% comp) in Q4, reaching $357 million. Hot sandwiches and dispensed beverages were standout performers. General merchandise sales grew 11% (4.3% comp) to $900 million, driven by CASY's strategic locations in rural Midwest areas.
- Fuel same-store gallons rose 0.9% in Q4, ending the year flat, aligning with CASY's forecast of -1% to +1%. Fuel margins stayed above 34.5 cents per gallon for the 12th consecutive quarter, hitting 36.5 cents in Q4. CASY's same-store gallon volume outperformed regional data by several hundred basis points, indicating market share growth.
- CASY's FY25 forecasts mirror its FY24 projections, targeting at least 8% EBITDA growth, inside comps of 3-5%, and same-store fuel gallons sold between -1% and +1%. Early FY25 results are tracking in line with these targets.
CASY continues to excel in the gas station and convenience store market by maintaining clean stores, innovating its prepared foods menu, and selecting lucrative locations for new stores, with plans to add at least 100 more in FY25. CASY's unique approach to food, particularly its marketing focus on pizza, has helped change consumer perceptions. The company also refreshed its menu with new sandwiches and thin-crust pizza last year. While fuel sales remain its primary income source, CASY's focus on inside sales growth enhances its margin profile. Given its strong outlook, CASY remains a compelling buy-and-hold stock.
