Caseys General Stores Inc. Earnings: Margins Shrink Again, but Net Income Climbs

Caseys General Stores Inc. (NASDAQ:CASY) reported higher profit for the second quarter as revenue showed growth. Casey’s General Stores and its wholly owned subsidiaries operate convenience stores under the names “Casey’s General Store,” “HandiMart” and “Just Diesel” in nine Midwestern states, mainly Iowa, Missouri, and Illinois.

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Caseys General Stores Earnings Cheat Sheet for the Second Quarter

Results: Net income for Caseys General Stores Inc. rose to $37.6 million (98 cents per share) vs. $21.7 million (51 cents per share) in the same quarter a year earlier. This marks a rise of 73.5% from the year earlier quarter.

Revenue: Rose 32.1% to $1.78 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CASY beat the mean analyst estimate of 97 cents per share. It fell short of the average revenue estimate of $1.85 billion.

Quoting Management: “We are pleased with the second quarter results, despite the continued challenges impacting our industry,” stated President and CEO Robert J. Myers. “We experienced a favorable gas margin and strong inside sales, resulting in a 15.6% increase in total gross profit.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 28.2%, with the biggest boost coming in the first quarter when revenue rose 37.6% from the year earlier quarter.

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 2.1 percentage points to 14.7% from the year earlier quarter. Over that time, margins have contracted on average 1.8 percentage points per quarter on a year-over-year basis.

The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 5.6% and in the fourth quarter of the last fiscal year, the figure rose 3.8%.

The company topped expectations last quarter after falling short of forecasts in the first quarter with net income of $1.03 versus a mean estimate of net income of $1.05 per share.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the third quarter has moved up from 44 cents a share to 46 cents over the last ninety days. The average estimate for the fiscal year is $3.11 per share, a rise from $3.10 ninety days ago.

Competitors to Watch: The Pantry, Inc. (NASDAQ:PTRY), Dairy Mart Convenience (DMCSQ), Susser Holdings Corp. (NASDAQ:SUSS), The Kroger Co. (NYSE:KR), Weis Markets, Inc. (NYSE:WMK), The Great Atlantic & Pacific Tea Co. (GAPTQ), AMCON Distributing Co. (AMEX:DIT), Ingles Markets, Inc. (NASDAQ:IMKTA), Winn-Dixie Stores, Inc. (NASDAQ:WINN), and Whole Foods Market, Inc. (NASDAQ:WFM).

Stock Performance: Shares of CASY were down 0.6% from the previous close.

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)