Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Casey's Shares Jumped

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

 Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of convenience-store chain Casey's General Stores (NASDAQ: CASY  ) jumped as much as 12% today and finished up 5.5%, after posting second-quarter earnings.

So what: The report wasn't anything to write home about. Net income actually fell 13% on a 7.2% jump in sales, and earnings per share met estimates at $0.85 a share. Revenue was in line as well. Same-store sales of groceries, gasoline, and cigarettes fell slightly, by less than a 1%, while prepared foods were a bright spot, with comps gaining 10.1%. Much of the other drop in same-store sales came from lower gasoline margins and a cigarette excise tax in Illinois, one of its key markets.

Now what: Casey's is healthier than the 13% drop in net income would indicate, though. Operating expenses increased by 10.6% in the quarter because of investing in remodeling stores, opening new locations, and converting stores to 24-hour service. The jump in the share price seemed to come from the gains in the prepared-food category, which is by far the highest-margin segment for Casey's, with gross margins at 62.5%, compared with just 15% overall. The segment has grown stronger than expected thanks to "expanded hours, pizza delivery, and major store deals." Watch that figure going forward, as it should help drive future profitability, and now contributes 32% of gross profits.

Don't miss the next update on Casey's. Add the stock to your Watchlist by clicking right here.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2149148, ~/Articles/ArticleHandler.aspx, 10/27/2016 5:12:24 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:00 PM
CASY $114.37 Down -0.89 -0.77%
Casey's General St… CAPS Rating: *****