Caseys General Stores, Inc. Earnings: Margins Suffer for Five Quarters Straight, but Net Income Climbs

Caseys General Stores, Inc. (NASDAQ:CASY) reported higher profit for the first quarter as revenue showed growth. Casey’s General Stores, Inc. and its wholly owned subsidiaries operate convenience stores under the name ‘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 First Quarter

Results: Net income for Caseys General Stores, Inc. rose to $39.4 million ($1.03 per share) vs. $37.3 million (73 cents per share) in the same quarter a year earlier. This marks a rise of 5.6% from the year earlier quarter.

Revenue: Rose 37.6% to $1.87 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CASY was about in line with expectations as the mean analyst estimate of a loss of $1.04 per share. Analysts were expecting revenue of $1.88 billion.

Quoting Management: “We are off to a great start for fiscal 2012 with a record quarter, due in part by operating 132 more stores this quarter versus last year’s first quarter,” said President and CEO Robert J. Myers. “The features of the new store design are proving to be very popular with our customers and are driving inside sales. We will continue to incorporate these features in our new store construction, replacements, remodels, and acquisitions.”

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 24.7%, with the biggest boost coming in the most recent 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 2.9 percentage points to 14.2% from the year earlier quarter. Over that time, margins have contracted on average 1.7 percentage points per quarter on a year-over-year basis.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 60 cents versus a mean estimate of net income of 50 cents per share.

The company has now seen net income rise in two straight quarters. In the fourth quarter of the last fiscal year, net income rose 3.8% from the year earlier.

Competitors to Watch: The Pantry, Inc. (NASDAQ:PTRY), Susser Holdings Corp. (NASDAQ:SUSS), The Kroger Co. (NYSE:KR), Weis Markets, Inc. (NYSE:WMK), AMCON Distributing Co. (AMEX:DIT), Ingles Markets, Inc. (NASDAQ:IMKTA), Winn-Dixie Stores, Inc. (NASDAQ:WINN), Wal-Mart (NYSE:WMT), Target (NYSE:TGT) and Whole Foods Market, Inc. (NASDAQ:WFM).

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(Source: Xignite Financials)