- Diluted Earnings Per Share (EPS): $13.43, a 13% increase from the prior year.
- Net Income: $502 million, a record figure.
- EBITDA: $1.1 billion, an 11% increase from the prior year.
- Inside Same-Store Sales: Up 4.4% or 11.2% on a two-year stack basis.
- Prepared Food and Dispensed Beverage Same-Store Sales: Up 6.8% or 14.4% on a two-year stack basis.
- Grocery and General Merchandise Same-Store Sales: Up 3.5% or 10% on a two-year stack basis.
- Inside Margin: Expanded 110 basis points year over year to 41%.
- Fuel Gross Profit: Up 4%, with total fuel gallons sold up 6%.
- Fuel Margin: Averaged $0.395 per gallon over the course of the year.
- Same-Store Operating Expenses (Excluding Credit Card Fees): Up 2.7% for the year.
- New Stores Built: 42 new stores in fiscal '24.
- Stores Acquired: 112 stores, including 22 in Texas.
- Fourth Quarter Diluted EPS: $2.34, a 57% increase from the prior year.
- Total Inside Sales (Q4): Rose 11.9% to nearly $1.3 billion.
- Inside Gross Profit (Q4): Up $72.1 million or 16% from the prior year.
- Prepared Food and Dispensed Beverage Sales (Q4): Increased by $42.7 million to $357 million, a 14% increase.
- Grocery and General Merchandise Sales (Q4): Increased by $91 million to $900 million, an 11% increase.
- Same-Store Prepared Food and Dispensed Beverage Sales (Q4): Up 8.8%.
- Prepared Food and Dispensed Beverage Margin (Q4): 58.1%, up 130 basis points from a year ago.
- Same-Store Grocery and General Merchandise Sales (Q4): Up 4.3%.
- Grocery and General Merchandise Margin (Q4): 34.4%, an increase of 140 basis points from the same period a year ago.
- Same-Store Fuel Gallons Sold (Q4): Up 0.9%.
- Fuel Margin (Q4): $0.365 per gallon, up approximately $0.019 per gallon from the same period last year.
- Retail Fuel Sales (Q4): Up $139 million due to a 9% increase in total gallons sold.
- Total Operating Expenses (Q4): Up 11% or $57 million.
- Depreciation (Q4): $92.3 million, up $11.7 million from the prior year.
- Net Income (Q4): $87 million, an increase of 55% from the prior year.
- EBITDA (Q4): $219 million, an increase of 32%.
- Total Available Liquidity: $1.1 billion as of April 30.
- Free Cash Flow: $371 million for the year.
- Return on Invested Capital: 12.1%, up 30 basis points from the prior year.
- Dividend Increase: 16%, marking the 25th consecutive year of dividend increases.
- Share Repurchase: $105 million for the year, with $295 million remaining on the existing authorization.
- Fiscal 2025 EBITDA Outlook: Expected to increase at least 8%.
- Fiscal 2025 Inside Same-Store Sales Outlook: Expected to increase 3% to 5%.
- Fiscal 2025 Same-Store Fuel Gallons Sold Outlook: Expected to be between -1% to +1%.
- Fiscal 2025 Total Operating Expenses Outlook: Expected to increase approximately 6% to 8%.
- Fiscal 2025 New Stores Outlook: Expected to add at least 100 stores.
- Net Interest Expense (Fiscal 2025): Expected to be approximately $56 million.
- Depreciation and Amortization (Fiscal 2025): Expected to be approximately $390 million.
- Purchase of Property and Equipment (Fiscal 2025): Expected to be approximately $575 million.
- Tax Rate (Fiscal 2025): Expected to be approximately 24% to 26%.
Release Date: June 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Casey's General Stores Inc (CASY, Financial) reported a record year for diluted earnings per share, finishing at $13.43, a 13% increase from the prior year.
- The company generated a record $502 million in net income and $1.1 billion in EBITDA, an increase of 11% from the prior year.
- Inside same-store sales were up 4.4%, with exceptionally strong results in the prepared food and dispensed beverage category, up 6.8%.
- Fuel gross profit was up 4%, with total fuel gallons sold up 6% and fuel margin averaging $0.395 per gallon.
- Casey's Rewards program now has over 8 million members, with rewards guests visiting the store more frequently and spending more per trip.
Negative Points
- Total operating expenses were up 11% or $57 million in the fourth quarter, with higher same-store employee expenses and increased costs for incentive compensation.
- Cheese costs were a headwind, with prices up $0.08 per pound from the prior year, impacting margins.
- The company expects same-store fuel gallons sold to be between negative 1% to positive 1% in fiscal 2025, indicating potential stagnation in fuel sales growth.
- Total operating expenses are expected to increase approximately 6% to 8% in fiscal 2025, which could pressure profitability.
- The company faces risks from the broader retail industry challenges and consumer health, which could impact future performance.
Q & A Highlights
Q: Can you discuss some of the value gaps you're seeing in prepared meals versus fast food competition? What are you doing to drive newness and innovation?
A: Darren Rebelez, CEO: We've taken a measured approach to pricing, maintaining a value gap between us and QSR competitors. Innovations like thin crust pizza and revamped lunch sandwiches have resonated well, driving performance in prepared foods.
Q: Can you talk about the margin outlook for inside store sales?
A: Steve Bramlage, CFO: We expect margins to be comparable to fiscal 2024. While cheese costs present a modest headwind, other commodities remain favorable. We've adjusted retail prices to preserve margins, especially in the grocery side.
Q: Can you break out the difference between traffic and ticket inside the prepared food business?
A: Darren Rebelez, CEO: Traffic was up about 1.5%, and the average ticket was up about 2.5% to 2.7%, leading to our overall comp for the quarter.
Q: Where are you on leveraging the 8 million Reward Members?
A: Darren Rebelez, CEO: Our digital team has done a great job. Rewards members visit more frequently and spend more per trip. We still have room to grow in one-to-one marketing to influence purchasing behaviors.
Q: Why is the low end of the multi-year CAGR the right growth rate for fiscal '25 given the current momentum?
A: Steve Bramlage, CFO: We feel confident in our guidance despite concerns about consumer health. Our value proposition remains strong, and we have the levers to achieve our strategic plan over the next couple of years.
Q: How do you see consumers' ability to absorb higher prices in grocery and general merchandise?
A: Darren Rebelez, CEO: We've taken modest price increases, and consumers are still purchasing, though they are making different decisions. Our reputation for value helps us in this environment.
Q: How did diesel impact fuel margins in the quarter?
A: Darren Rebelez, CEO: Diesel margins were strong, though volume was slightly down due to softness in the construction industry. Our fuel team has been effective in managing pricing and balancing margin and volume.
Q: What are your expectations for the mix of build versus acquisition in the 100-plus store additions for fiscal '25?
A: Steve Bramlage, CFO: We expect a 50/50 mix between new builds and acquisitions. This will result in higher PP&E spending due to more new units and ongoing remodel activities.
Q: Can you update us on the current penetration of private label products?
A: Darren Rebelez, CEO: Private label accounts for about 10% of gross profit dollars, or 13% if excluding categories like tobacco and beer. We continue to innovate and expand our private label offerings.
Q: What are the biggest opportunities and risks for fiscal '25?
A: Darren Rebelez, CEO: The biggest opportunity lies in store growth, particularly through M&A. The biggest risk is consumer health, but our strong value proposition positions us to benefit even if consumer spending tightens.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
