Casey's General (NASDAQ:CASY) Stores, Inc. CASY is likely to register an increase in the top line when it reports fourth-quarter fiscal 2021 numbers on Jun 8, after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $2,159 million, indicating an improvement of 19.1% from the prior-year reported figure.
However, the bottom line of this operator of convenience stores is expected to decrease year over year. We note that the Zacks Consensus Estimate for earnings for the quarter under review has been stable at 67 cents over the past 30 days. The figure suggests a sharp decline from earnings of $1.67 reported in the year-ago period.
Notably, this Ankeny, IA-based company has a trailing four-quarter earnings surprise of 17.9%, on average. In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 11.8%.
Key Factors to Note
Undeniably, Casey's price and product optimization strategies, fleet card program, capital reallocation plans, and digital engagements comprising mobile app and online ordering capabilities are commendable. The rollout of curbside pickup option and Casey’s reward program have been benefiting the overall performance. The company has been increasing online grocery items at all outlets.
Markedly, Casey’s Grocery & Other Merchandise category is likely to have contributed to the company’s top-line performance. The Zacks Consensus Estimate for sales for the category is pegged at $628 million, which suggests an increase of 10.5% from the prior-year reported figure. Also, the consensus estimate indicates a jump of 8.8% in same-store sales.
Again, the company’s Prepared Food and Fountain category is likely to have positively impacted total revenues. The Zacks Consensus Estimate for sales for the category stands at $257 million, which indicates a jump of 11.8% from the prior-year reported figure. Also, the consensus estimate indicates an increase of 6.3% in same-store sales.
With the resumption of economic activities, things have started to improve. Remarkably, the Zacks Consensus Estimate suggest an increase of 6.4% in total gallons sold during the quarter under review. It also indicates an increase of 4.5% in fuel gallons same-store sales. As a result, sales at the Fuel category might have risen year over year. The Zacks Consensus Estimate for sales for the Fuel category is pegged at $1,194 million, which suggests year-over-year growth of 19.5%.
In spite of aforementioned tailwinds, concerns related to higher operating expenses cannot be ignored. This may be due to store hours steadily returning to pre-COVID levels and costs related to the ongoing pandemic. Also, any deleverage in commodity costs and higher promotional activity might have weighed on margins. On its last earnings call, management guided lower fourth-quarter profit compared with the prior year. Management highlighted that the prior-year quarter benefited from unusually high fuel margin and lower operating expenses due to reduced store operating hours owing to the imposition of lockdowns.
What Does the Zacks Model Unveil?
Our proven model does not conclusively predict an earnings beat for Casey's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Casey's has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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Signet Jewelers (NYSE:SIG) SIG has an Earnings ESP of +2.84% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
KB Home (NYSE:KBH) KBH has an Earnings ESP of +1.87% and a Zacks Rank #2.
Dave & Buster's Entertainment PLAY has an Earnings ESP of +107.90% and a Zacks Rank #3.
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