What happened
Shares of Casey's General Stores (CASY 0.85%) climbed 20.8% in June, according to data from S&P Global Market Intelligence, after the convenience store chain served up exceptional fiscal fourth-quarter 2019 results and even better guidance.
The stock popped 10% just on June 11, after the company confirmed its quarterly revenue had climbed a modest 4.3% year over year to $2.178 billion, helped by a 5.7% increase in same-store sales. Meanwhile, net income increased to $25.2 million, or $0.68 per share, up 33% from $0.51 per share in the year-ago period. Both figures easily exceeded analysts' consensus estimates for earnings closer to $0.42 per share on slightly lower revenue.
Image source: Getty Images.
So what
CEO Terry Handley -- who had just announced his impending retirement, effective June 24, after 38 years with the company -- credited recent growth to a combination of gross profit margin expansion, disciplined operating-expense management, and new store openings.
"The entire team demonstrated a focused effort to drive the business forward while working diligently to build out new capabilities that will support future earnings growth," Handley said, "including completing several value-creation-plan milestones in the fourth quarter."
Notably among those milestones, the company officially launched its new e-commerce site and implemented a fuel price optimization platform in all of its stores. In fiscal 2020, Casey's also plans to roll out a new in-store price optimization program, a new in-store order management system, and a new mobile app.
Now what
Looking ahead to the full fiscal-year 2020, Casey's also told investors to expect comparable-store fuel sales in the range of a 0.5% decline to a 1% jump, but with an improved fuel margin of $0.205 to $0.225 per gallon (up from $0.186 in fiscal 2019). It is further targeting grocery comps growth of 2.5% to 4%, with improved grocery margin of 32% to 33% (up from 31.5% last fiscal year). And it expects prepared-food comps growth of 3% to 6%, with margins of 61% to 63% (roughly flat from 62.2% in fiscal 2019).
After coupling that guidance with Casey's relative outperformance to end its fiscal year, and with the stock up only slightly in calendar 2019 leading up to last month's report, it was hardly surprising to see shares bounce higher in response.
