Casey's Stock Dips Despite Strong Q1 Earnings and Revenue Beat
The convenience store chain's shares fell in after-hours trading as the market digested strong results against an unchanged full-year outlook.
Casey's General Stores, Inc. (NASDAQ: CASY) reported first-quarter earnings that significantly surpassed Wall Street expectations, yet its stock saw a modest decline in after-hours trading, suggesting investors may have already priced in the strong performance.
The Iowa-based convenience store operator announced , easily beating analyst estimates that hovered around $5.07. Revenue for the quarter came in at $4.56 billion, also topping the consensus forecast of $4.47 billion. Despite the robust results, the company's shares slipped approximately 1.4% in extended trading on Monday.
The positive quarterly performance was driven by impressive growth in both in-store and fuel sales. Casey's noted a 4.3% increase in inside same-store sales and a 1.7% rise in same-store fuel gallons sold. This resulted in a 14.8% jump in total inside gross profit to $705.5 million and an 18.8% increase in total fuel gross profit.
CEO Darren Rebelez credited the strong quarter to a successful summer merchandising plan and effective execution by the company's team. “Our inside same-store sales were driven by positive traffic growth,” Rebelez stated, highlighting the company's ability to serve guests efficiently. The market's lukewarm reception appears tied to the company's decision to rather than raising it. Casey's continues to project 10% to 12% EBITDA growth and plans to add at least 80 new stores.
The disconnect between the indicates that investors may have been anticipating an even more bullish forecast following such a strong start to the fiscal year. While the quarterly numbers were excellent, the unchanged guidance suggests a more cautious long-term view from management, leading to a classic 'sell the news' reaction from the market.