Casey's revenues up in second quarter, shares lag behind estimates with higher operating costs

Hannah Rodriguez
Des Moines Register

As the pandemic eases due to the availability of the COVID-19 vaccine, customers continue to return to Casey’s General Stores.

The Ankeny-based convenience store chain reported this week total revenues surged to $3.26 million for the August to October second quarter of its 2022 fiscal year, a 47.3% increase compared with last year and outpacing the Zacks investing service estimate.

But it’s quarterly earnings of $2.59 per share declined from $3.19 per share in Casey’s first quarter. Darren Rebelez, president and CEO of Casey’s, said on a quarterly earnings conference call with investors on Wednesday that the company’s earnings before interest, taxes and amortization was down primarily due to increased operating expenses.

Higher wage rates and credit card fees contributed to the expenses, according to a statement from the company. Casey's additionally acquired 137 locations of Nebraska-based Bucky's Convenience Stores in May for $580 million.

More:Casey's completes $580 million purchase of Nebraska-based Bucky's Convenience Stores

“While down from the prior year, [earnings per share] were still impressive in the wake of the extremely challenging retail operating environment that we’re currently facing,” Rebelez said Wednesday. 

In September, Casey’s launched a new breakfast menu that Rebelez said on the call was “proving to be a big hit with our guests and exceeding our early expectations,” leading to a 6% increase in inside-same-store sales compared to last year.

The same month Casey’s announced another expansion, acquiring 38 Pilot-branded convenience stores and two truck stop locations for $220 million. Rebelez said the acquisitions — with most of the convenience stores around Knoxville, Tennessee, and the truck stops, branded as Pilot Travel Centers, in Nashville and Middlesboro, Kentucky — are expected to close in the next quarter

More:Casey's General Stores continues expanding, acquiring 40 more locations in Tennessee, Kentucky

“That’s much newer territory for us,” Rebelez said on the investor call. “One of the things we found attractive about this deal was 40 stores all concentrated in the Knoxville area, which allows us to get immediate scale.”

Casey's General Store shares closed at $187.36, down 6.89% on Wednesday.

Hannah Rodriguez covers retail for the Register. Reach her at herodriguez@registermedia.com or on Twitter @byherodriguez.

Casey's reported total revenues surged to $3.26 million for the August to October second quarter of its 2022 fiscal year, a 47.3% increase compared with last year.