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1. Company Snapshot

1.a. Company Description

Casey's General Stores, Inc., together with its subsidiaries, operates convenience stores under the Casey's and Casey's General Store names.Its stores offer a selection of food, including freshly prepared foods, such as pizza, donuts, and sandwiches; beverages; tobacco and nicotine products; health and beauty aids; automotive products; and other nonfood items.The company's stores also provide motor fuel for sale on a self-service basis; and gasoline and diesel fuel.


In addition, its stores offer various products, include soft drinks, energy, water, sports drinks, juices, coffee, and tea and dairy products; beer, wine, and spirits; snacks, candy, packaged bakery, and other food items; ice, ice cream, meals, and appetizers; health and beauty aids, electronic accessories, housewares, and pet supplies; and lotto/lottery and prepaid cards.Further, the company operates two stores that sells tobacco and nicotine products; one liquor store; and one grocery store.As of April 30, 2022, it operated 2,452 convenience stores.


Casey's General Stores, Inc.was founded in 1959 and is headquartered in Ankeny, Iowa.

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1.b. Last Insights on CASY

Casey's General Stores' recent performance was driven by strong Q4 earnings, beating estimates with a 12.4% increase in diluted EPS to $2.63. The company's net income rose 13.0% to $98.3 million, and EBITDA increased 20.1% to $263.0 million. Inside same-store sales growth of 1.7% contributed to the strong performance, along with increased fuel gallons sold and operational efficiencies. The company's acquisition of Fikes, which was completed in the quarter, also had a positive impact on results. Additionally, Casey's announced a dividend increase, further boosting investor confidence.

1.c. Company Highlights

2. Casey's General Stores Delivers Strong Q1 FY2026 Results

Casey's General Stores reported a robust first-quarter fiscal year 2026 performance, with diluted EPS reaching $5.77, a 19% year-over-year increase. Net income and EBITDA grew 20% to $215 million and $414 million, respectively. The strong earnings were driven by a 4.3% increase in inside store sales, fueled by a 5.6% growth in prepared food and dispensed beverages. Grocery and general merchandise sales also saw a 3.8% rise, with margins increasing 50 basis points due to favorable mix shifts. Fuel sales increased 1.7% year-over-year, with a margin of $0.41 per gallon.

Publication Date: Sep -09

📋 Highlights
  • Earnings Growth: Diluted EPS rose 19% to $5.77, with net income and EBITDA up 20% to $215M and $414M, respectively.
  • Prepared Foods & Beverages: Inside store sales grew 4.3%, driven by 5.6% growth in prepared foods and dispensed beverages.
  • Margin Expansion: Grocery margins increased 50 bps to 36% due to favorable product mix, shifting toward higher-margin nonalcoholic beverages.
  • Fuel Performance: Fuel sales rose 1.7% with $0.41/gallon margin, aided by Mid-Continent market share gains.

Operational Efficiency and Cost Management

Operating expenses increased 3% on a same-store basis, excluding credit card fees, with labor hours decreasing 1%. This improvement in operational efficiency was a notable highlight, as the company continues to manage costs effectively. Cheese costs are currently slightly favorable year-over-year, with 70% of the company's needs locked in for the remainder of the fiscal year, providing a degree of cost stability.

Growth Strategy and Outlook

Casey's expects to maintain its current share repurchase authorization and continues to prioritize investments in EBITDA and ROIC accretive growth opportunities. The company is targeting 4% to 5% unit growth per year, split between new store development and small-scale acquisitions. With a strong financial position, Casey's is confident in its ability to navigate the current challenging economic environment and continue to deliver value to shareholders.

Valuation and Pricing

With a P/E Ratio of 36.77 and an EV/EBITDA of 18.96, the market appears to be pricing in a significant level of growth. The company's ROIC of 8.2% and ROE of 16.28% suggest a strong return on investment. Analysts estimate next year's revenue growth at 9.1%, which, if achieved, would likely support the current valuation. The actual EPS of $5.77 beat estimates of $5.02, indicating a positive surprise.

Category Performance and Margin Analysis

Growth in the grocery and general merchandise category is driven by nonalcoholic beverages, especially energy drinks. The category's gross margin is at its best in a long time, driven by effective cost management and a favorable product mix. While the gross margin for this category reached 36% in the first quarter, the company cautions against expecting this to be a consistent figure going forward, prioritizing overall inside store gross profit velocity instead.

3. NewsRoom

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Casey's (CASY) Q2 Earnings on the Horizon: Analysts' Insights on Key Performance Measures

Dec -04

Source: zacks.com

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Casey's General Has the Economics of Convenience Stores Down

Dec -04

Source: barrons.com

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Are Retail-Wholesale Stocks Lagging Casey's General Stores (CASY) This Year?

Nov -19

Source: zacks.com

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Casey's and PEPSI® Team Up to Celebrate the Ultimate Duo: Pizza and Pepsi

Nov -19

Source: businesswire.com

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Casey's and Dr Pepper® Kickoff Fansville $100,000 Tuition Giveaway

Nov -17

Source: businesswire.com

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Daniel Loeb's Strategic Moves: A Closer Look at Norfolk Southern Corp's 5.52% Portfolio Impact

Nov -14

Source: gurufocus.com

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Advisors Capital Management LLC Increases Stock Holdings in Casey’s General Stores, Inc. $CASY

Nov -14

Source: defenseworld.net

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Casey's Proudly Stands with Military Servicemembers, Invites Guests to Round-up in Support of America's Heroes and Their Families

Nov -05

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.62%)

6. Segments

Fuel

Expected Growth: 2.5%

Casey's General Stores, Inc.'s 2.5% fuel growth is driven by increasing same-store sales, strategic pricing, and expanded fuel offerings. Additionally, the company's growing convenience store count, particularly in rural areas, contributes to higher fuel volumes. Furthermore, Casey's loyalty program and mobile app enhancements encourage repeat business and drive fuel sales.

Grocery and General Merchandise

Expected Growth: 2.8%

Casey's General Stores, Inc.'s 2.8% growth in Grocery and General Merchandise is driven by increasing same-store sales, successful private label offerings, and strategic pricing initiatives. Additionally, the company's focus on enhancing the customer shopping experience through remodels and technology investments has contributed to the growth.

Prepared Food and Dispensed Beverage

Expected Growth: 3.2%

Casey's Prepared Food and Dispensed Beverage segment growth of 3.2% is driven by increased demand for convenience and quality food options, successful implementation of digital marketing strategies, and expansion of mobile ordering and curbside pickup services, as well as favorable weather conditions and strategic pricing initiatives.

Other

Expected Growth: 2.2%

Casey's General Stores, Inc.'s 2.2% growth in 'Other' segment is driven by increased sales of private label products, expansion of grocery and general merchandise offerings, and strategic partnerships to enhance customer experience. Additionally, the company's focus on digital transformation, including mobile apps and online ordering, has contributed to the growth.

7. Detailed Products

Fuel

Casey's General Stores, Inc. operates a chain of convenience stores that offer a range of fuel options, including gasoline, diesel, and alternative fuels.

Food and Beverages

Casey's offers a variety of prepared foods, including pizza, sandwiches, salads, and snacks, as well as a range of hot and cold beverages.

Convenience Items

Casey's stores carry a range of convenience items, including groceries, health and beauty aids, and other everyday essentials.

Private Label Products

Casey's offers a range of private label products, including coffee, water, and snacks, under its own brand names.

Pizza Delivery

Many Casey's locations offer pizza delivery, allowing customers to order hot, fresh pizzas and have them delivered to their doorstep.

8. Casey's General Stores, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Casey's General Stores, Inc. faces moderate threat from substitutes due to the presence of alternative convenience stores and grocery stores that offer similar products and services.

Bargaining Power Of Customers

Casey's General Stores, Inc. has a low bargaining power of customers due to its strong brand presence and limited switching costs for customers.

Bargaining Power Of Suppliers

Casey's General Stores, Inc. faces moderate bargaining power of suppliers due to the presence of multiple suppliers for its products and services.

Threat Of New Entrants

Casey's General Stores, Inc. faces low threat from new entrants due to the high barriers to entry in the convenience store industry, including high capital requirements and regulatory hurdles.

Intensity Of Rivalry

Casey's General Stores, Inc. operates in a highly competitive industry with many established players, leading to a high intensity of rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 38.61%
Debt Cost 4.07%
Equity Weight 61.39%
Equity Cost 8.06%
WACC 6.52%
Leverage 62.89%

11. Quality Control: Casey's General Stores, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

564.62$

Current Price

564.62$

Potential

-0.00%

Expected Cash-Flows