Casey's General Stores (CASY) saw its shares surge approximately 15% on Wednesday, reaching $875.38, after the company reported fiscal fourth-quarter earnings that significantly exceeded Wall Street expectations. The strong performance was fueled by robust fuel margins, a surge in prepared food sales—particularly pizza—and a series of shareholder-friendly moves, including a dividend increase and a $1 billion share buyback authorization.
Earnings Beat and Key Metrics
For the quarter ended April 30, Casey's posted diluted earnings of $4.37 per share, a 66.2% increase year over year, with net income reaching $162.7 million. Revenue rose to $4.57 billion from $3.99 billion in the same period last year, easily surpassing analyst estimates of $3.31 per share and $4.21 billion in revenue. The results were highlighted by a fuel margin of 46.9 cents per gallon, up from 37.6 cents a year earlier, and total fuel gross profit climbing 29.1% to $397.4 million. Same-store fuel gallons increased 1.5%, indicating solid underlying demand.
Inside-store sales also contributed significantly, with same-store sales for food and merchandise rising 5.5%. Prepared food and dispensed beverage comps grew 6.6%, driven by whole pizzas, sides, appetizers, and non-alcoholic drinks. The inside margin improved to 42.4% from 41.2% a year ago.
Capital Returns and Guidance
Casey's board approved a 14% increase in the quarterly dividend to 65 cents per share, marking the 27th consecutive year of dividend growth. The board also expanded the share buyback authorization to $1 billion, with approximately $63 million in stock repurchased during the quarter. Looking ahead, the company provided fiscal 2027 guidance that includes inside same-store sales growth of 2% to 5%, inside margin above 42%, and same-store fuel gallons ranging from a 1% decline to a 1% increase. Casey's targets EBITDA growth of 8% to 10%, plans to open at least 120 stores through acquisitions and new builds, and expects capital spending of approximately $800 million.
CEO Darren Rebelez stated that the company delivered another record fiscal year and concluded its three-year plan on an extremely high note. For the full fiscal year, Casey's reported diluted EPS of $19.16, net income of $714.4 million, and EBITDA close to $1.5 billion.
Market Reaction and Analyst Views
Barron's named Casey's the S&P 500's best performer on Wednesday, as the stock hit an intraday high of $889.00 before settling near $875. The rally came after the company's recent promotion to the S&P 500 index in April, replacing Hologic, which boosted its visibility among institutional investors. RBC Capital raised its price target on Casey's to $794 from $792, maintaining a Sector Perform rating, noting that the fiscal 2027 EBITDA forecast of $1.60 billion to $1.63 billion exceeded both their own and consensus estimates. However, the new target remains below the current market price, suggesting that much of the upside may already be priced in.
Risks and Outlook
While the quarter was strong, challenges remain. Fuel margins are vulnerable to compression if wholesale-retail spreads narrow, and the company's guidance for flat same-store fuel gallons reflects cautious expectations. Fourth-quarter operating expenses rose 10.1%, and planned capital spending for fiscal 2027 includes higher depreciation and interest costs. Investors will be watching closely as Casey's holds an investor day on June 24 to outline its longer-term strategy. With shares already well above Tuesday's close, the stakes for that presentation are elevated.
