Casey’s released its financial results for the three months and year ended April 30, as well as announced that the board of directors has unanimously voted to elect Darren M. Rebelez as the company’s board chair. In addition to this new title, Rebelez currently serves as president, CEO and a current director.
Rebelez succeeds H. Lynn Horak as board chair, who along with Diane Bridgewater, are retiring from the board on Sept. 6.
The company also announced that the board unanimously elected Judy A. Schmeling, a director since 2018, to the role of lead independent director. As part of the board leadership transition, which was the result of a comprehensive evaluation process, the board also enhanced its lead independent director duties, which are set forth in the company’s Corporate Governance Guidelines.
“On behalf of the board, we are pleased to appoint Darren as board chair, in addition to his continuing role as president and CEO,” said Horak. “Darren has made a significant impact on the company since he joined in 2019 and the board believes his strategic vision and proven leadership capabilities make him the right person to lead the company into the future. The board is also pleased that Judy, with her decades of leadership both as an executive and in the boardroom, has stepped into the role of lead independent director.”
“I am honored by the confidence the board has placed in me to serve as its chair, and I look forward to working closely with Judy, as our new lead independent director, for years to come,” said Rebelez. “On behalf of the board and the entire Casey’s team, I also want to extend a sincere thank you to both Lynn and Diane for their combined 30 years of distinguished service and leadership on the board. They helped build Casey’s into the great organization it is today and we wish them nothing but the best in their retirement from the board come September.”
Fourth Quarter Financial Results
The company noted that fourth quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was up slightly versus the prior year, primarily due to higher inside gross profit partially offset by higher operating expense and lower fuel gross profit. Net income and diluted earnings per share (EPS) were down compared to the same period a year ago, as the slight increase in adjusted EBITDA was more than offset by a higher tax rate and higher depreciation expense.
Total inside sales were up 8.4% for the quarter and total inside gross profit was up 8.9%. Inside same-store sales were up 6.5%, or 12% on a two-year stack basis, driven by strong performance in non-alcoholic and alcoholic beverages in the grocery and general merchandise category as well as bakery and hot food in the prepared food and dispensed beverage category.
Inside margin was up 20 basis points for the quarter primarily due to mix shift to higher margin items like grab and go beverages in the grocery and general merchandise category as well as increased private label penetration versus the prior year.
Same-store gallons sold were flat for the quarter. Fuel gross profit was down 2.2% due to a decrease of 1.6 cents per gallon partially offset by a 2.4% increase in total fuel gallons sold. The company did not sell any renewable fuel credits (RINs) in the fourth quarter, while $1.1 million in RINs were sold in the same period last year.
The company also noted an increase in operating expenses by 6.3% in the fourth quarter. Approximately 1.5% of the increase is due to operating 69 more stores than a year ago.
Fiscal Year 2023 Growth
“Casey’s closed out its three-year strategic plan with another record fiscal year for its shareholders, highlighted by 19% EBITDA growth and 31% diluted EPS growth,” said Rebelez. “Inside same-store sales performed well, up 6.5%, or 13.6% on a two-year stack basis, led by alcoholic and non-alcoholic beverages, as well as strong performance in pizza and bakery. We continued to strike the right balance between fuel gallon volume and gross profit margin throughout the year to drive fuel gross profit up 15.7% from the prior year. The team did a tremendous job managing cost as same-store operating expense excluding credit-card fees were only up 2.8% versus the prior year. Finally, we are busy operating 81 new stores, finishing the year with 2,521 stores. As we look to discuss our next strategic plan on June 27, I am proud of the hard work and dedication of the Casey’s team, and we are well positioned to continue delivering long-term shareholder value.”
Fiscal Year 2024 Expectations
Casey’s expects the following performance during fiscal 2024. The company expects inside same-store sales to increase 3% to 5% and to improve inside margin to approximately 40% to 41%. The company expects same-store fuel gallons sold to be between negative 1% to positive 1%. Total operating expenses are expected to increase approximately 5% to 7%. The company expects to add approximately 110 stores in fiscal 2024. Net interest expense is expected to be approximately $55 million. Depreciation and amortization is expected to be approximately $340 million and the purchase of property and equipment is expected to be approximately $500 to $550 million. The tax rate is expected to be approximately 24% to 26% for the year.
Casey’s is a Fortune 500 company operating over 2,500 convenience stores. Founded more than 50 years ago, the company has grown to become the third-largest convenience store retailer and the fifth-largest pizza chain in the United States.
