CASY Q1 Earnings Beat Estimates on Inside and Fuel Gains

Casey’s General Stores, Inc. CASY posted first-quarter fiscal 2027 earnings of $7.37 per share, which increased 27.7% year over year and surpassed the Zacks Consensus Estimate of $6.60 by 11.7%. Revenues rose 24.3% to $5,678.3 million, beating the $5,624 million consensus mark by 1%.

Higher inside and fuel gross profit supported the quarter, partly offset by increased operating expenses. Inside same-store sales rose 3.2%, while fuel same-store gallons slipped 0.3%.

CASY's Inside Sales Gain on Prepared Food Demand

Total inside sales increased 5.6% year over year to $1,777.5 million. Prepared food and dispensed beverage same-store sales advanced 4.8%, driven mainly by positive traffic led by whole pizzas. Grocery and general merchandise same-store sales increased 2.7%, helped by non-alcoholic beverages.

Inside gross profit rose 6.3% to $749.8 million, while inside margin expanded about 30 basis points to 42.2%. Prepared food and dispensed beverage margin improved to 59.3% from 58%, reflecting favorable mix and cost-of-goods management, while grocery and general merchandise margin eased to 35.6% from 35.9%.

Casey's Fuel Profit Climbs on Margin Strength

Total fuel gallons sold increased 2.5% to 934.2 million gallons as a larger store base more than offset the modest same-store decline. Fuel gross profit climbed 19.6% to $446.9 million.

Fuel margin, excluding credit card fees, widened to 47.8 cents per gallon from 41 cents a year earlier. Management said its fuel capabilities helped the company navigate a volatile environment and produce strong results during the quarter.

CASY's Costs Rise as Store Base Expands

Operating expenses increased 8% to $754.1 million. Operating 64 more stores than a year earlier accounted for about 2% of the increase, while higher same-store credit card fees added roughly 1.5%.

Same-store employee expense contributed about 1% of the increase, primarily because of higher labor rates, while labor hours were nearly flat. Insurance accounted for another roughly 1% of the increase.

Casey's Earnings Growth Outpaces Expense Increase

Net income advanced 27.1% year over year to $273.7 million. EBITDA increased 17.1% to $485.1 million as higher inside and fuel gross profit outweighed part of the cost pressure.

Cash provided by operating activities totaled $384.1 million compared with $372.4 million a year ago. Casey’s spent $194.4 million on property and equipment and ended July with about $1.4 billion of available liquidity, including $524.1 million in cash and cash equivalents.

CASY Expands Store Base and Returns Cash

Casey’s ended the quarter with 2,959 stores, up from 2,944 at the start of the fiscal year. The company added nine newly constructed stores and 12 acquired locations while closing or divesting six stores.

The company repurchased about $45.6 million of shares during the quarter and had approximately $973 million remaining under its authorization. The board also approved a quarterly dividend of 65 cents per share, payable on Nov. 13, 2026.

Casey's Keeps Fiscal 2027 Outlook Unchanged

For fiscal 2027, Casey’s continues to expect inside same-store sales growth of 2%-5%, with inside margin above 42%. Same-store fuel gallons are projected to range from down 1% to up 1%, while operating expenses are expected to increase 5%-7%.

The company continues to target EBITDA growth of 8%-10% and plans to open at least 120 stores through acquisitions and new construction. Casey’s also expects about $800 million of capital spending and roughly $95 million of net interest expense.

CASY's Three-Year Plan Adds a Longer Growth Runway

Casey’s new three-year plan calls for at least 400 additional stores during fiscal 2027 through fiscal 2029 through a mix of new builds and acquisitions. The investor plan also targets roughly $2 billion of free cash flow over the period and continued inside-store margin expansion.

The strategy pairs unit growth with operating-efficiency initiatives intended to keep operating-expense growth below EBITDA growth. Identified workstreams include store simplification, supply-chain efficiency, kitchen optimization, centralized procurement and a scalable support model as the store network expands.

Shares of this Zacks Rank #3 (Hold) company have fallen 19.9% over the past three months compared with the industry’s decline of 17.2%.

Stocks to Consider

The Vita Coco Company, Inc. COCO, a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1 (Strong Buy). COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
 
The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings per share (EPS) calls for growth of 31.6% and 64.7%, respectively, from the year-ago figures.
 
Target Corporation TGT, a general merchandise retailer, currently carries a Zacks Rank of 2 (Buy). TGT delivered a trailing four-quarter earnings surprise of 10.5%, on average.

The Zacks Consensus Estimate for Target’s current fiscal-year sales and EPS implies growth of 4.7% and 37.8%, respectively, from the year-ago figures.

Laird Superfood, Inc. LSF is a consumer product company that develops, manufactures and markets plant-based, natural and functional food and beverage products. LSF currently carries a Zacks Rank #2.
 
The Zacks Consensus Estimate for Laird Superfood’s current fiscal-year sales and EPS suggests growth of 188.2% and 104%, respectively, from the year-ago figures. LSF delivered an earnings surprise of 100% in the last reported quarter.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research