Convenience store operator Casey's General Stores (NASDAQ:CASY) is set to release first-quarter results on Thursday. Below are the vital stats to get Fools up to speed on what to expect.
What analysts say:
- Buy, sell, or waffle? Six analysts follow Casey's. Two are bullish on the stock, three are on the fence with hold ratings, and one is bearish. The Motley Fool CAPS community currently gives the company a three-star rating (out of five).
- Revenue. Analysts are projecting $1.29 billion in second-quarter sales, or just more than 17% above last year's first-quarter sales amount.
- Earnings. Analysts expect quarterly earnings of $0.45, or about 36% above the $0.33 reported last year.
What management says:
Back when Casey's released high-octane fourth-quarter results, it announced the following goals for fiscal 2008:
- Grow gasoline gallon comps 2% "with an average margin of 10.7 cents per gallon."
- Grow grocery comps 4.3% at an average margin of 32.2%.
- Grow prepared food and fountain comps 8.4% at an average margin of 62%.
- Expand gross profits faster than operating expenses.
- Acquire 50 stores and open 10 new ones.
What management does:
Despite the high-profit food and fountain sales, gasoline accounts for more than 70% of total sales and is a business with a razor-thin margin. Therefore, overall company profit margins are quite low. However, selling gas can pay off thanks to high volume, and it lures customers inside for more lucrative product sales. The end result has been decent returns on invested capital of just less than 10% for the past few quarters.
|
01/06 |
04/06 |
07/06 |
10/06 |
01/07 |
04/07 | |
|---|---|---|---|---|---|---|
|
Gross |
17.3% |
16.9% |
15.8% |
15.6% |
15.7% |
16.2% |
|
Operating |
3.5% |
3.5% |
3.0% |
2.7% |
2.8% |
3.1% |
|
Net |
1.9% |
1.9% |
1.7% |
1.5% |
1.6% |
1.7% |
One Fool says:
Casey's also has a solid track record of double-digit sales and earnings growth as it opens new stores and acquires mom-and-pop operators in the fragmented convenience store industry. And over the last 12 months, net profit margins at Casey's came in more than double those of The Pantry (NASDAQ:PTRY), the only other public pure-play c-store operator.
Casey's also tends to focus on small, rural towns, keeping it out of the clutches of giant food and gas retailers such as Wal-Mart (NYSE:WMT), CVS (NYSE:CVS), Kroger (NYSE:KR), and 7-Eleven. That makes Casey's the only game in town in certain locales, which only helps its competitive position.
For related Foolishness:
- What Starbucks Can Learn From Casey's
- The Pantry Still Growing by Leaps and Bounds
- Mighty Casey's Hits a Homer: Fool by Numbers
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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.
