It has been about a month since the last earnings report for Casey's General Stores (CASY). Shares have lost about 6.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Casey's due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Casey’s Q2 Earnings Top Estimates, Inside Same-Store Sales Grow 4%

Casey's reported second-quarter fiscal 2025 results, wherein the bottom line improved year over year and beat the Zacks Consensus Estimate. The top line declined year over year and missed the consensus mark. The company demonstrated strength in inside same-store sales, underscoring its ability to engage customers effectively.

Casey’s inside same-store sales growth was propelled by the prepared food and dispensed beverage segment, with hot sandwiches and cold dispensed beverages standing out as top performers. The company also witnessed robust strong inside gross profit growth. CASY also concluded the Fikes buyout during the fiscal quarter.

Casey's Quarterly Performance: Key Insights

CASY, one of the leading convenience store chains in the United States, posted quarterly earnings of $4.85 per share, which surpassed the Zacks Consensus Estimate of $4.24 and increased 14% from $4.24 reported in the prior-year period.

Total revenues of $3.9 billion missed the Zacks Consensus Estimate of $4 billion and decreased 2.9% year over year.

Total inside sales jumped 9% year over year to $1.47 billion in the fiscal quarter. This was due to strong performances in the prepared food and dispensed beverage categories, which included hot sandwiches and dispensed beverages as well as non-alcoholic and alcoholic beverages in the grocery and general merchandise segment. Inside same-store sales increased 4% compared with a 2.9% rise registered in the year-ago period.

Insight Into CASY’s Margins & Expenses Performance

Gross profit rose 8.2% year over year to $958.6 million in the fiscal quarter. The gross margin expanded 250 basis points to 24.3%.

The total inside gross profit increased 12% year over year to $619.7 million. Meanwhile, the inside margin increased 110 basis points to 42.2% due to the product mix and asset protection initiatives.

EBITDA increased 14.1% year over year to $348.9 million in the quarter under discussion, whereas the EBITDA margin expanded 130 basis points to 8.8%. This can be attributed to higher inside and fuel gross profit, partially offset by increased operating expenses due to operating 93 additional stores.

The company witnessed a rise of 5.2% in operating expenses of $609.7 million. This rise was caused by the operation of 93 additional stores compared with the same period last year, which accounted for about 4% of the increase. An additional 1% of the rise came from same-store employee expenses, where higher labor rates were partially offset by reduced same-store labor hours.

Decoding CASY’s Segmental Performance

Prepared Food & Dispensed Beverage sales rose 9.2% year over year to $417.8 million. Same-store sales increased 5.2% compared with 6.1% in the year-ago quarter. The Prepared Food & Dispensed Beverage margin declined 30 bps to 58.7% from 59% in the year-ago period. 

Grocery & General Merchandise sales increased 8.8% to $1.05 billion in the fiscal quarter. Same-store sales increased 3.6% compared with 1.7% growth in the year-ago quarter. The Grocery & General Merchandise margin grew 160 bps to 35.6% from 34% in the year-ago period.

We note that Fuel sales declined 8.8% year over year to $2.41 billion in the fiscal quarter. Fuel gallons sold jumped 6.2% to $775.9 million due to an increase in store count.

Fuel gallons same-store sales were down 0.6% year over year. The fuel margin decreased to 40.2 cents per gallon from 42.3 cents in the prior-year period.

CASY’s Financial Snapshot: Cash, Debt & Equity Overview

Casey's, which operated 2,685 stores as of Oct. 31, 2024, ended the fiscal quarter with cash and cash equivalents of $352 million, long-term debt and finance lease obligations (net of current maturities) of $2.46 billion and shareholders’ equity of $3.34 billion. 

In the fiscal second quarter, the company did not repurchase any shares and has shares worth around $295 million available under its current share buyback authorization.

Sneak Peek Into CASY’s Outlook

Casey’s has updated its 2025 outlook mainly due to the buyout of Fikes, which was completed on Nov. 1, 2024.

For fiscal 2025 including the impact of the Fikes acquisition, management now expects EBITDA growth to be at least 10%, up from the previous rise of 8%. The company anticipates total operating expenses to increase 11-13%, revised from the earlier forecast of 6-8%. It expects to invest $550 million in fiscal 2025 compared with the previous estimation of $575 million.

For fiscal 2025, Casey's still expects inside same-store sales to increase 3-5% and anticipates an inside margin to be comparable with fiscal 2024. Management foresees same-store fuel gallons sold between negative 1% and positive 1%. The company anticipates opening about 270 stores in fiscal 2025.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -21.39% due to these changes.

VGM Scores

At this time, Casey's has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Casey's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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