Casey's Inside Same-Store Sales Rise on Food & Beverage Strength
Casey’s General Stores, Inc. CASY is drawing more customers into its stores through prepared food and drinks, with whole pizzas leading food demand and nonalcoholic beverages bolstering grocery purchases. That mix favors its higher-margin food business and helps explain why inside-store profitability improved despite softer beer, snack and cigarette demand.
In the first quarter of fiscal 2027, inside same-store sales rose 3.2% year over year and 7.7% on a two-year stacked basis. Total inside sales increased 5.6% to $1.78 billion, and inside gross profit climbed 6.3% to $749.8 million. The chain operated 64 more stores than a year earlier.
Prepared food and dispensed beverages led the gains, with same-store sales up 4.8%. Management said traffic, rather than higher prices, accounted for most of the growth. Whole-pizza unit sales rose nearly 10%, helping lift category revenues 7.4% to about $493 million.
Grocery and general merchandise same-store sales grew 2.7%, driven chiefly by nonalcoholic beverages. Energy drinks and nicotine alternatives recorded double-digit growth, though weaker beer sales weighed on the category. Inside margin reached 42.2%, up 30 basis points, as prepared food made up more of the sales mix. The prepared food and dispensed beverage margin rose to 59.3% from 58%, with lower cheese costs and a change in distribution cost allocation contributing to the increase.
Casey’s maintained its fiscal 2027 forecast for inside same-store sales growth of 2-5% and an inside margin above 42%. Remodeling of former CEFCO stores created a modest headwind to quarterly comparable sales. Sustained demand for pizza and beverages will be important to delivering on that outlook.
Casey's Price Performance, Valuation & Estimates
Shares of Casey’s have lost 23.9% over the past three months compared with the industry’s 19.9% decline.
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From a valuation standpoint, CASY is trading at a forward 12-month price-to-sales ratio of 1.08, up from the industry average of 0.82. It has a Value Score of B.
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The Zacks Consensus Estimate for Casey's fiscal 2027 earnings implies year-over-year growth of 11.9%, whereas the same for fiscal 2028 indicates an uptick of 10.8%. Estimates for fiscal 2027 and 2028 have been revised upward by 3 cents and 11 cents, respectively, over the past seven days.
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Casey's currently has a Zacks Rank #3 (Hold).
Key Picks
We have highlighted three better-ranked stocks in the retail space, namely Target Corporation TGT, Dollar Tree DLTR and Ross Stores Inc. ROST.
Target Corporation offers guests fashionable, differentiated merchandise and everyday essentials at discounted prices. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Target’s current fiscal-year earnings and sales suggests growth of 37.8% and 5%, respectively, from the year-ago actuals. TGT delivered a trailing four-quarter average earnings surprise of 10.5%.
Dollar Tree is an operator of discount variety stores offering a broad assortment of everyday consumables and discretionary merchandise. The company also carries a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Dollar Tree's current fiscal-year earnings and sales suggests a growth of 34.6% and 6.7%, respectively, from the year-ago actuals. DLTR delivered a trailing four-quarter average earnings surprise of 12.2%.
Ross Stores operates as an off-price retailer of apparel and home accessories. The company also holds a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Ross Stores’ current fiscal-year earnings and sales indicates growth of 32.7% and 12.4%, respectively, from the year-ago actuals. ROST delivered a trailing four-quarter average earnings surprise of 11.2%.
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This article originally published on Zacks Investment Research (zacks.com).
