Retail stock under pressure: Casey’s General Stores Inc (NASDAQ: CASY)

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Casey’s General Stores Inc (NASDAQ: CASY) stock fell over 4.3% in the pre-market session of June 9th, 2020 (Source: Google finance) after the company posted mixed results for the fourth quarter of FY 20. At the end of April, 2020, the Company had signed 2 acquisition stores under agreement for purchasing it and a new store pipeline of 93 sites, that includes 24 under construction. The company has temporarily deferred some spending related to new store construction driven by spread of COVID-19. Due to the continued uncertainty of COVID-19, the company has not provided guidance for the fiscal year ending April 30, 2021.

CASY in the fourth quarter of FY 20 has reported the adjusted earnings per share of $1.67, missing the analysts’ estimates for the adjusted earnings per share of $1.97, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue of $1.81 billion in the fourth quarter of FY 20. For the fourth quarter, operating expenses had risen up by 6.2% to $367.5 million mainly due to the operations of 61 more stores than the same quarter in the prior year.

Meanwhile, for the fourth quarter, the average margin had increased to 40.8 cents per gallon, compared to 18.6 cents per gallon for the same quarter a year ago. Same-store gallons sold in the quarter had fallen by 14.7%. Total gross profit dollars for the fourth quarter rose more than 96% to $198.8 million, while total gallons sold for the quarter declined by 10.7% to 487.7 million. For the first half of the quarter, same-store gallons sold were strong but shelter in place restrictions for the back half of the quarter had significantly affected the quarterly gallon volume. At the same time, the macro-economic factors drove the wholesale fuel costs to decline which led to unprecedented fuel margins.

Moreover, for Grocery and Other Merchandise segment, during the fourth quarter, same-store sales had fallen down 2.0% with an average margin of 30.4%. Total sales for the fourth quarter of the segment had increased by 1% to $568.1 million while total gross profit dollars declined by 2.4% to $172.9 million.

Additionally, the Company has $300 million remaining under its existing share repurchase program and there were no repurchases made against this authorization in the fourth quarter. Further, the Company has declared a quarterly dividend of $0.32 per share, which will be payable August 17, 2020 to shareholders of record on August 3, 2020.

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