Casey's General Stores, Inc. CASY reported solid fourth-quarter fiscal 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
The company delivered a strong fourth quarter, continuing to execute its three-year strategic plan. Inside same-store sales outperformed the industry, supported by robust performances in hot sandwiches, bakery items, and both alcoholic and non-alcoholic beverages. The fuel team gained market share while maintaining healthy margins. Ongoing operational efficiencies contributed to a reduction in same-store labor hours for the twelfth consecutive quarter.
Casey's Quarterly Performance: Key Insights
CASY, one of the leading convenience store chains in the United States, posted quarterly earnings of $2.63 per share, which surpassed the Zacks Consensus Estimate of $1.93. This represents a 12.4% increase from $2.34 reported in the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Casey's General Stores, Inc. Price, Consensus and EPS Surprise
Casey's General Stores, Inc. Price, Consensus and EPS Surprise
Casey's General Stores, Inc. price-consensus-eps-surprise-chart | Casey's General Stores, Inc. Quote
The company reported total revenues of $3,992.8 million, which beat the Zacks Consensus Estimate of $3,969 million. The metric increased 10.9% from $3,600 million posted in the year-ago period.
Total inside sales jumped 12.4% year over year to $1,413.6 million in the fiscal quarter. This was driven by strong performance in bakery, and hot and cold prepared foods in the prepared food and dispensed beverage category, along with non-alcoholic beverages within the grocery and general merchandise category. Inside same-store sales increased 1.7% compared with a 5.6% rise registered in the year-ago period. We expected inside same-store sales to grow 2.6% in the quarter under review.
Insight Into CASY’s Margins & Expenses Performance
Gross profit rose to $926 million, up from $798.1 million in the same quarter last year. Gross margin expanded 100 basis points to 23.2%.
The total inside gross profit increased 12.5% year over year to $582.4 million. Meanwhile, the inside margin was 41.2%, flat year over year.
EBITDA increased 20.1% year over year to $263 million in the quarter under discussion, driven by higher inside and fuel gross profit. However, this was partially offset by increased operating expenses from 246 additional stores. EBITDA margin increased 50 basis points to 6.6%, surpassing our expectation of 6%.
The company witnessed a rise of 14.5% in operating expenses of $663 million. This rise was caused by the operation of 246 additional stores compared with the prior-year period, which accounted for about 12% of the increase, including one-time deal and integration costs of approximately $4 million from the Fikes acquisition. Insurance expenses contributed approximately 3% to the overall rise. Meanwhile, same-store employee expenses remained relatively flat, as wage rate increases were largely offset by a reduction in same-store labor hours. We estimated a 14.9% increase in operating expenses.
Decoding CASY’s Segmental Performance
Prepared Food & Dispensed Beverage sales rose 9.7% year over year to $391.7 million, missing our estimate of $403.9 million. Same-store sales decreased 1.5% compared with 8.8% in the year-ago quarter. The Prepared Food & Dispensed Beverage margin declined 30 bps to 57.8% from 58.1% in the year-ago period.
Grocery & General Merchandise sales increased 13.5% to $1,021.9 million in the fiscal quarter, surpassing our estimate of $1,014.5 million. Same-store sales decreased 1.8% compared with 4.3% in the year-ago quarter. The Grocery & General Merchandise margin grew 40 bps to 34.8% from 34.4% in the year-ago period.
We note that Fuel sales increased 7.1% year over year to $2,438.9 million in the fiscal quarter, surpassing our estimate of $2,422.2 million. Fuel gallons sold jumped 17.8% to $818.6 million, due to operating more stores and a 0.1% rise in same-store gallons. We anticipated an increase of 20.9% in fuel gallons sold. The fuel margin increased to 37.6 cents per gallon from 36.5 cents in the prior-year period.
Casey's, which operated 2,904 stores as of April 30, 2025, ended the fiscal quarter with cash and cash equivalents of $326.7 million, long-term debt and finance lease obligations (net of current maturities) of $2.41 billion and shareholders’ equity of $3.51 billion.
In the fiscal fourth quarter, the company did not repurchase any shares and has around $295 million available under its current buyback authorization.
In June, the management increased the quarterly dividend by 14% to 57 cents per share. This marks the 26th consecutive year of dividend increases. The dividend is scheduled to be paid on Aug. 15, 2025, to its shareholders of record as of Aug. 1.
Sneak Peek Into CASY’s Outlook
For fiscal 2026, management expects EBITDA growth to be 10% to 12%, slightly below the 13.3% reported in fiscal 2025. The company anticipates total operating expenses to increase 8% to 10%. The purchase of property and equipment is expected to be approximately $600 million.
Casey's expects inside same-store sales to increase 2-5% and an inside margin to be 41% compared with 41.5% reported in fiscal 2025. Management foresees same-store fuel gallons sold between negative 1% and positive 1%.
The company anticipates opening about 80 stores in fiscal 2026, through a mix of M&A as well as new store construction, bringing the three-year strategic plan period total to approximately 500 stores.
Shares of this Zacks Rank #3 (Hold) company have risen 16.1% in the past three months compared with the industry’s 5% growth.
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