Core Insights - Casey's General Stores reported strong fiscal 2025 third-quarter results, exceeding analysts' expectations in earnings and revenue, driven by strategic growth initiatives [2][6] Financial Performance - Earnings per share (EPS) for the quarter was $2.33, surpassing the consensus estimate of $2.00, while revenue reached $3.904 billion, exceeding the expected $3.723 billion [2][3] - Year-over-year revenue growth was 17.3%, with EBITDA increasing by 11.4% to $242 million [3][6] - Fuel gross profit rose by 17.4% to $302 million, and inside gross profit increased by 14.3% to $573 million [3][7] Strategic Initiatives - The company has focused on expanding its store footprint through acquisitions, adding 228 stores and building 21 new locations since the start of the fiscal year [5][8] - Prepared food offerings have been a key driver of growth, with same-store inside sales increasing by 3.7% and sales of prepared foods and beverages rising by 4.7% [7][11] Operational Insights - Operating expenses increased by approximately 18% due to acquisition-related costs, but same-store operating expenses rose only 3.2% when excluding credit card fees [8][11] - The company maintained solid liquidity with $1.3 billion in available resources and did not repurchase shares during the quarter, indicating a strategy to preserve cash reserves [9] Future Outlook - Casey's anticipates an EBITDA growth of roughly 11% for fiscal 2025, with plans to add about 270 new stores throughout the year [10][11] - Continued expansion into less competitive markets and a focus on high-margin products are expected to remain key strategic priorities [11]

Financial Performance - Net income for the third quarter was $87.1 million, flat compared to the prior year, with diluted EPS also flat at $2.33[5] - Total revenue for the third quarter increased by 17.2% to $3.9 billion, driven by a 15.3% rise in inside sales and a 20.4% increase in fuel gallons sold[18] - EBITDA for the third quarter rose 11.4% to $242.4 million, primarily due to higher inside and fuel gross profit[6] - Net income for the nine months ended January 31, 2025, was $448,213 thousand, compared to $414,952 thousand for the same period in 2024, reflecting an increase of 8.0%[22] - Net income for the three months ended January 31, 2025, was $87,097,000, compared to $86,933,000 for the same period in 2024, reflecting a slight increase[27] - EBITDA for the nine months ended January 31, 2025, reached $937,030,000, up from $840,372,000 in 2024, indicating a growth of approximately 11.5%[27] Sales and Revenue Growth - Inside same-store sales increased by 3.7% year-over-year, with prepared food and dispensed beverage same-store sales up 4.7%[7] - Same-store fuel gallons sold increased by 1.8%, with total fuel gross profit up 17.4% to $302.1 million[8] - Revenue for the three months ended January 31, 2025, was $3,903,633 thousand, up from $3,329,247 thousand in the same period of 2024, indicating a growth of 17.2%[24] - Same-store sales growth for prepared food and dispensed beverage was 4.7% for the fiscal year 2025[24] Expenses and Liabilities - Total operating expenses increased by approximately 18%, influenced by operating 254 additional stores and one-time costs from the Fikes acquisition[9] - Total liabilities increased to $4,802,862 thousand as of January 31, 2025, from $3,332,052 thousand on April 30, 2024, an increase of 43.9%[20] - Interest expenses increased to $29,415,000 for the three months ended January 31, 2025, compared to $14,146,000 in 2024, showing a significant rise[27] - Federal and state income taxes for the nine months ended January 31, 2025, totaled $136,578,000, compared to $129,020,000 in 2024, marking an increase of about 5.4%[27] - Depreciation and amortization expenses for the three months ended January 31, 2025, were $105,203,000, up from $88,950,000 in 2024, reflecting a growth of approximately 18.3%[27] Liquidity and Capital - As of January 31, 2025, the company had approximately $1.3 billion in available liquidity, including $395 million in cash[12] - Cash and cash equivalents at the end of the period increased to $394,815 thousand from $177,881 thousand year-over-year, a rise of 121.5%[22] - The company reported a significant increase in payments for acquisition of businesses, net of cash acquired, totaling $1,211,567 thousand for the nine months ended January 31, 2025, compared to $296,809 thousand in 2024[22] Future Outlook - The company expects fiscal year 2025 EBITDA to increase approximately 11% and plans to add around 270 stores[15][16] - The company is exploring growth opportunities and potential impacts from the Fikes transaction, with expectations for future periods being cautiously optimistic[28] - The company acknowledges risks related to the execution of its strategic plan and the integration of acquired stores, which may affect future performance[28] Corporate Governance - The board approved a quarterly dividend of $0.50 per share, payable on May 15, 2025[14] - The earnings conference call is scheduled for March 12, 2025, at 7:30 a.m. CDT, providing an opportunity for investors to gain insights into the company's performance[29] - Corporate information and earnings details can be accessed through the company's investor relations website[29] - Investor relations contact is Brian Johnson, reachable at (515) 446-6587, for any inquiries related to financial performance[30]

Store Operations - As of January 31, 2025, Casey's operates a total of 2,893 stores, with 228 new stores added through acquisitions, including 198 from the Fikes acquisition[74]. - Operating expenses increased by $101,292 (17.8%) to $670,200, with approximately 14% of the increase attributed to operating 254 more stores[88]. - Operating expenses increased by $179,887 (10.5%), with approximately 8% attributed to operating 254 more stores compared to the prior year[98]. Financial Performance - Total revenue for the third quarter of fiscal 2025 increased by $574,386 (17.3%) compared to the same period in fiscal 2024, primarily driven by the Fikes acquisition[82]. - Net income for the third quarter of fiscal 2025 was $87,097, slightly up from $86,933 in the comparable period[92]. - Total revenue for the first nine months of fiscal 2025 increased by $685,243 (6.1%) to $11,948,141 compared to $11,262,898 in the prior year, primarily driven by $459,422 from the Fikes acquisition[93]. - Net income increased by $33,261 (8.0%) to $448,213, driven by higher profitability in-store and in fuel, partially offset by increased operating expenses[102]. - EBITDA for the first nine months of fiscal 2025 increased by 11.5% to $937,030 compared to $840,372 in the prior year[105]. Revenue Breakdown - Same-store sales of prepared food and dispensed beverage increased by 4.7%, while grocery and general merchandise increased by 3.3% during the quarter[80]. - Fuel revenue increased by $315,148 (15.4%) due to a 20.4% increase in gallons sold, despite a 4.2% decrease in average retail price per gallon[82]. - Other revenue increased by $73,772 (117.8%) for the third quarter of fiscal 2025, primarily driven by an increase in wholesale fuel revenue from the Fikes acquisition[83]. - Prepared food and dispensed beverage revenue increased by $115,402 (10.4%) due to a same-store sales increase of 4.4% and approximately 6.0% from store growth[93]. - Grocery and general merchandise revenue rose by $295,035 (10.4%) with a same-store sales increase of 2.6% and approximately 7.8% from store growth[93]. - Retail fuel revenue increased by $211,611 (3.0%) due to an increase in gallons sold by 244,531 (11.5%), despite a 7.6% decrease in average retail price per gallon[93]. Cash Flow and Investments - Cash provided by operating activities increased by $152,396 to $756,996, primarily from improved revenue less cost of goods sold[109]. - Cash used in investing activities increased by $920,353, totaling $1,537,066, primarily due to acquisition-related activity from the Fikes acquisition[110]. - Cash provided by financing increased by $1,157,278, mainly due to proceeds from long-term debt of $1,100,000 to partially fund the Fikes acquisition[111]. Debt and Interest Rates - As of January 31, 2025, the company's total long-term debt amounts to $2,439,038,000 after accounting for current maturities and debt issuance costs[112]. - The company has a variable rate incremental term loan facility of $850,000,000, requiring quarterly installments ending October 30, 2029[112]. - An immediate 100-basis-point move in interest rates would result in an approximate annualized impact of $10.4 million on interest expense[120]. - The company has issued various senior notes with interest rates ranging from 2.85% to 5.43%, with total senior notes amounting to $1,000,000,000[112]. Risk Factors - The company faces risks from increases in food ingredient costs and potential disruptions in the distribution network[114]. - The company is subject to extensive governmental regulations that could adversely affect revenues, particularly related to tobacco and nicotine products[115]. - The company acknowledges that general economic conditions and consumer preferences may impact its financial condition and results of operations[116]. - The company emphasizes the importance of compliance with data security regulations to protect sensitive information, which could impact financial results[114]. EV Infrastructure - Casey's has 230 EV charging stations at 47 stores across 13 states as of January 31, 2025, reflecting its commitment to expanding EV infrastructure[77]. Taxation - The effective tax rate decreased to 19.2% in the third quarter of fiscal 2025, down from 24.1% in the same period of fiscal 2024[91]. Hedging Strategies - The company utilizes futures contracts to hedge against the volatility of fuel prices associated with non-store inventoried fuel[121]. Future Capital Needs - Future capital needs for operations and store growth are expected to be met from cash generated by operations and additional long-term debt[112].

Core Insights - Casey's General Stores, Inc. is set to release its third-quarter financial results on March 11, with expected earnings of $2.08 per share, a decrease from $2.33 per share in the same quarter last year [1] - The company projects quarterly revenue of $3.74 billion, an increase from $3.33 billion a year earlier [1] - Casey's shares experienced a decline of 4.3%, closing at $381.68 [2] Analyst Ratings - BMO Capital analyst Kelly Bania reinstated a Market Perform rating and raised the price target from $400 to $450 [3] - Deutsche Bank analyst Krisztina Katai maintained a Buy rating and increased the price target from $451 to $454 [3] - Gordon Haskett analyst Chuck Grom initiated coverage with a Hold rating and a price target of $400 [3] - Wells Fargo analyst Anthony Bonadio maintained an Overweight rating and raised the price target from $415 to $425 [3]

Core Viewpoint - Casey's General Stores, Inc. is expected to report a revenue increase of 13.7% year-over-year for the third quarter of fiscal 2025, with revenues estimated at $3,786 million, while earnings per share are projected to decline by 21.5% to $1.83 [1][2]. Financial Performance - The company has a history of exceeding earnings expectations, with an average earnings surprise of 16.1% over the trailing four quarters and a 14.4% beat in the last reported quarter [2]. - Total operating expenses are anticipated to rise by 20% in the third quarter, primarily due to one-time integration costs associated with the acquisition of Fikes [8]. Business Strategy - Casey's is enhancing its food selection and optimizing pricing strategies, which have driven strong sales growth across various segments [4]. - The grocery and general merchandise category is expected to see a 14% sales increase, while prepared food and dispensed beverages are projected to grow by 14.5% [5]. - The fuel segment remains a critical revenue driver, with expected sales growth of 14.8% for the quarter due to optimized fuel margins [6]. Strategic Expansion - The acquisition of Fikes, the largest in Casey's history, is expected to contribute over $200 million in inside sales and approximately 200 million gallons of fuel in the second half of fiscal 2025 [7]. - While the integration of Fikes will introduce short-term financial pressures, stronger benefits are anticipated in later quarters as synergies are realized [8].

Core Viewpoint - Analysts expect Casey's General Stores (CASY) to report quarterly earnings of $1.83 per share, reflecting a year-over-year decline of 21.5%, while revenues are projected to be $3.83 billion, an increase of 15.1% from the previous year [1]. Earnings Estimates - There have been no revisions in the consensus EPS estimate for the quarter over the last 30 days, indicating stability in analysts' forecasts [1][2]. Revenue Projections - Analysts forecast 'Net Sales- Fuel' at $2.36 billion, representing a year-over-year increase of 15.2% [4]. - 'Net Sales- Other' is expected to reach $79.98 million, indicating a growth of 27.7% year-over-year [4]. - 'Net Sales- Prepared Food & Dispensed Beverage' is projected at $399.94 million, reflecting a 14.5% increase from the prior year [4]. - 'Net Sales- Grocery & General Merchandise' is estimated to be $993.32 million, showing a 14.8% change from the previous year [5]. Store and Sales Metrics - The consensus estimate for 'Number of Stores (EOP)' is 2,902, up from 2,639 a year ago [5]. - Analysts predict 'Number of Fuel gallons sold' to be 810.30 million, compared to 689.25 million in the previous year [5]. - 'Same-store sales - Prepared Food & Dispensed Beverage - YoY change' is expected to be 4.7%, down from 7.5% a year ago [6]. - 'Number of Stores (BOP)' is projected to reach 2,685, up from 2,521 year-over-year [6]. Gross Profit Estimates - 'Gross Profit- Grocery & General Merchandise' is estimated at $341.58 million, compared to $293.18 million last year [7]. - 'Gross Profit- Prepared Food & Dispensed Beverage' is projected at $232.18 million, up from $208.33 million year-over-year [7]. - 'Gross Profit- Other' is expected to be $27.91 million, slightly up from $27.77 million in the same quarter last year [8]. - 'Gross Profit- Fuel' is estimated at $311.54 million, compared to $257.25 million a year ago [8]. Stock Performance - Over the past month, shares of Casey's have returned -5.7%, while the Zacks S&P 500 composite has seen a -4.1% change [8].

Core Insights - Insider buying activity is closely monitored by investors as it can provide insights into the long-term outlook of companies [1][10] FedEx (FDX) - FDX shares have gained approximately 12% over the past year, underperforming compared to the S&P 500 [3] - The CFO of FedEx recently purchased 1,000 shares for just under $275,000, increasing total shares owned by over 10% [4] Casey's General Stores (CASY) - CASY shares have performed strongly, gaining nearly 40% over the past year and outperforming the S&P 500 [5] - A director purchased 500 shares at a total cost of just under $200,000, increasing the total stake by more than 20% [8] Centene (CNC) - CNC shares have declined nearly 20% over the past year, significantly underperforming the S&P 500 [9] - Several insiders made purchases totaling approximately $1.6 million just before the Christmas holiday, although the near-term outlook remains bearish with analysts revising expectations downward [9]

Valuation and Stock Performance - Casey's General Stores, Inc. (CASY) is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 26.09X, which is a premium compared to the industry average of 22.68X and the S&P 500's average of 22.23X, indicating that the stock is overvalued [1] - Over the past month, shares of CASY have lost 5.1%, while the industry and S&P 500 declined by 5.3% and 0.8%, respectively [3] - Closing at $396.76, shares are trading below the 50-day simple moving average of $409.10, raising concerns about the stock's short-term outlook [4] Operating Expenses and Profitability Challenges - Casey's is facing rising operating expenses, which increased by 5.2% year-over-year to $609.7 million in the second quarter of fiscal 2025, primarily due to the operation of 93 additional stores [6] - The trend of rising operating expenses has been consistent over the past two quarters, with increases of 8.7% and 11% respectively, which could pressure profit margins [7] - The acquisition of Fikes is expected to significantly increase operating expenses, with one-time integration costs projected between $15-$20 million in the third quarter and total operating expenses expected to grow by 11-13% for fiscal 2025 [8] Sales Performance and Growth Initiatives - Casey's reported a 0.6% decline in same-store fuel gallons sold for the fiscal second quarter, with a contraction in fuel margin to 40.2 cents per gallon from 42.3 cents the previous year [10] - The prepared food and dispensed beverage segment, crucial for profitability, saw a gross margin decline of 30 basis points year-over-year to 58.7%, driven by rising input costs [11] - Inside sales grew by 9% year-over-year to $1.47 billion, supported by strong performance in prepared foods and beverages [17] Future Outlook and Strategic Plans - Casey's has reaffirmed its full-year guidance for fiscal 2025, expecting inside same-store sales growth of 3% to 5% and at least a 10% increase in EBITDA [18] - The company plans to open approximately 270 new stores during the fiscal year to drive continued revenue growth [18] - Casey's maintains a strong liquidity position with $1.25 billion as of October 31, 2024, and generated $160 million in free cash flow for the fiscal quarter, up from $145.6 million year-over-year [19]

Core Insights - Dividend growth stocks provide stable returns and portfolio growth through increasing annual distributions, which can be reinvested for compounded performance [1] - The stocks discussed are growth stocks with total returns projected in the high-double-digits for 2024, and significant growth over the past five and ten years [2] Group 1: Packaging Corporation of America (PKG) - PKG has experienced nearly 100% price appreciation over the last eighteen months, with a dividend yield of 2.11% and a P/E ratio of 27.63 [4] - The company is expected to see adjusted EPS growth of nearly 25% in 2024, with a payout ratio of only 55%, indicating strong dividend sustainability [5] - Analysts have increased their price targets for PKG by nearly 50% in the latter half of 2024, suggesting a positive revision trend [6] Group 2: Cintas (CTAS) - Cintas operates with a strong balance sheet and has a dividend yield of 0.74%, with a P/E ratio of 53.48, indicating high-quality operations [7] - The company is expected to sustain growth in the high single digits, supported by expanding market presence and share repurchases [8] Group 3: Casey's General Stores (CASY) - CASY has a dividend yield of 0.47% and a P/E ratio of 29.58, with plans to sustain margins despite headwinds in 2024 [12] - The company is acquiring Fikes Wholesale to enhance its regional presence, which will support future growth [12] - CASY has a low payout ratio of less than 15%, positioning it well to continue its history of dividend increases [13]

Store Operations - As of October 31, 2024, the total store count reached approximately 2,685, with an acquisition of 198 stores from Fikes bringing the total to about 2,900 stores[48][49]. - The company operates 178 EV charging stations at 41 stores across 13 states as part of its EV growth strategy[52]. Financial Performance - The company reported diluted earnings per share of $4.85 for Q2 fiscal 2025, an increase from $4.24 in the same quarter last year[56]. - Total revenue for the second quarter of fiscal 2025 decreased by $117,629 (2.9%) compared to the same period in fiscal 2024, totaling $3,946,771[56]. - Same-store sales for prepared food and dispensed beverages increased by 5.2%, while grocery and general merchandise sales rose by 3.6% during the quarter[53]. - Net income rose by $22,136 (13.9%) to $180,918, driven by higher profitability in-store and in fuel[58]. - Total revenue for the first six months of fiscal 2025 increased by $110,857 (1.4%) compared to the same period in fiscal 2024[60]. - Prepared food and dispensed beverage revenue rose by $67,662 (9.0%) due to a 4.7% increase in same-store sales and approximately 4.3% from store growth[60]. - Grocery and general merchandise revenue increased by $157,309 (8.0%) driven by a 5.5% increase from store growth and 2.5% from same-store sales[60]. - Net income increased by $33,097 (10.1%) to $361,116, attributed to higher profitability in stores and fuel[62]. - EBITDA for the first six months of fiscal 2025 increased by 11.5% to $694,662 compared to $622,757 in the prior year[63]. Operating Expenses - Operating expenses increased by $29,976 (5.2%) to $609,679, primarily due to operating 93 more stores than the previous year[56]. - Operating expenses increased by $78,595 (6.9%) primarily due to operating 93 more stores compared to the prior year[62]. Cash Flow and Debt - Cash provided by operating activities rose by $70,277 to $552,057 for the six months ended October 31, 2024[66]. - Cash used in investing activities decreased by $61,176, with expenditures of $257,567 for property and equipment and acquisitions[66]. - Cash provided by financing activities increased by $1,142,884, primarily due to proceeds from long-term debt of $1,100,000 for the Fikes acquisition[66]. - As of October 31, 2024, the company's total long-term debt amounted to $2,461,922,000 after accounting for current maturities and debt issuance costs[68]. - The company has a variable rate term loan facility with a balance of $231,250,000, which requires quarterly installments ending April 21, 2028[68]. - The company has issued various senior notes with interest rates ranging from 2.85% to 5.43%, with total amounts due reaching $1,537,000,000[68]. Market Risks and Hedging - An immediate 100-basis-point increase in interest rates would result in an approximate annualized impact of $10.6 million on interest expense[73]. - The company utilizes futures contracts to hedge against the volatility of fuel prices associated with non-store inventoried fuel[73]. - The company is exposed to market risks related to fuel price volatility, which could adversely affect its financial results[73]. - The company cautions that various risk factors, including food ingredient costs and supply chain disruptions, could materially impact its operations[70]. - The company emphasizes the importance of high-quality credit issuers to mitigate default risk in its investment portfolio[73]. - The company does not speculate in trading financial instruments and ensures all hedges are matched against recorded physical transactions[73]. Taxation - The effective tax rate increased to 24.5% in Q2 fiscal 2025, up from 23.6% in the same period last year[58]. Fuel Revenue - Retail fuel revenue decreased by $231,846 (8.8%) due to a 14.1% drop in average retail price per gallon, despite a 6.2% increase in gallons sold[56]. - Same-store fuel gallons sold experienced a 0.6% decrease during the quarter[53]. - Retail fuel revenue decreased by $103,537 (2.0%) as the average retail price per gallon fell by 8.6%, despite a 7.2% increase in gallons sold[60].