Casey's General Stores, Inc. (NASDAQ:CASY) is a leading convenience store operator in the Midwest, with a strong focus on food service and a commitment to providing exceptional value to its customers. The company has consistently delivered impressive financial results, showcasing its ability to navigate industry challenges and capitalize on emerging opportunities.

Financials

In the fiscal year ended April 30, 2024, Casey's reported record annual net income of $501,972,000 and annual revenue of $14,862,913,000. The company's annual operating cash flow reached $892,953,000, while its annual free cash flow stood at $370,949,000. These robust financial metrics underscore Casey's operational excellence and its capacity to generate sustainable shareholder value.

During the fourth quarter of fiscal 2024, Casey's continued to demonstrate its prowess, reporting diluted earnings per share of $2.34, a 57% increase from the prior-year period. Total revenue for the quarter was $3,329,247,000, a slight decrease of 0.1% compared to the same quarter in the previous year. This slight decline was primarily attributable to a 4.9% decrease in retail fuel revenue, which was partially offset by an 11.4% increase in prepared food and dispensed beverage revenue and an 8.8% increase in grocery and general merchandise revenue.

Business Overview

The company's focus on its prepared food and dispensed beverage segment has been a key driver of its success. In the fourth quarter, this category saw a 14% increase in sales to $357,000,000, with same-store sales up 8.8%. The strong performance was driven by the continued success of the company's thin crust pizza offering, as well as the launch of a refreshed sandwich platform that has become a staple of the lunch menu.

Casey's grocery and general merchandise segment also delivered impressive results, with same-store sales increasing 4.3% in the fourth quarter. The company attributed this growth to strong sales in non-alcoholic and alcoholic beverages, as well as a favorable mix shift towards smaller pack sizes in the alcohol category.

On the fuel side, Casey's same-store fuel gallons sold increased 0.9% in the fourth quarter, outperforming the relevant Opus geographic data by several hundred basis points. The company's fuel margin of $0.365 per gallon was up approximately $0.019 per gallon compared to the same period last year, demonstrating the effectiveness of its fuel pricing strategy.

Outlook

Looking ahead, Casey's provided guidance for fiscal 2025, expecting EBITDA to increase by at least 8%. The company anticipates inside same-store sales to grow between 3% and 5%, with inside margins comparable to fiscal 2024. For fuel, Casey's expects same-store gallons sold to be between negative 1% and positive 1%.

Recent Developments

The company's strategic initiatives continue to drive its success. Casey's is focused on accelerating its food business, growing its store count, and enhancing operational efficiency. In fiscal 2024, the company built 42 new stores and acquired an additional 112 stores, putting it well on track to meet or exceed its three-year goal of at least 350 new stores.

Liquidity

Casey's strong balance sheet and ample liquidity provide the company with the financial flexibility to pursue strategic growth opportunities. As of April 30, 2024, the company had total available liquidity of $1.1 billion and no significant debt maturities until fiscal 2026.

The company's commitment to shareholder value is evident in its consistent dividend increases. In the fourth quarter, the board of directors voted to increase the dividend by 16% to $0.50 per share, marking the 25th consecutive year of dividend increases.

Casey's has also been active in repurchasing its shares, having repurchased $105 million worth of stock during fiscal 2024. The company still has $295 million remaining on its existing share repurchase authorization, underscoring its focus on enhancing shareholder returns.

Risks and Challenges

The convenience store industry has faced its share of challenges, including the ongoing impact of the COVID-19 pandemic and volatility in fuel prices. However, Casey's has demonstrated its resilience and ability to adapt to these changing market conditions. The company's strong brand, diversified revenue streams, and focus on operational excellence have positioned it well to continue delivering consistent growth and shareholder value.

Conclusion

Overall, Casey's General Stores remains a compelling investment opportunity in the convenience store sector. The company's robust financial performance, strategic initiatives, and commitment to shareholder returns make it a standout player in the industry.