Yahoo Finance Casey's (CASY) Operational Efforts Help Widen the Spectrum
Casey's General Stores Inc. CASY continues to distinguish itself in the convenience store sector through robust operational strategies that bolster its market position and financial performance. A resilient business operating model, stellar omnichannel capabilities, expanded customer outreach and exclusive private-label offerings strengthen Casey's competitive position.
Decoding Casey's Strategies
Casey's shines brightly in the retail landscape due to its ingenious pricing and product optimization strategies, successful expansion of private brands and adept digital engagement through mobile apps and online ordering systems. Ranked as the third-largest convenience retailer and the fifth-largest pizza chain in the United States, Casey's self-distribution strategy, strong performance in the Inside category and strategic acquisitions indicate a promising future.
Casey’s focus on technology advancements, merchandise ordering efficiency, inventory management and data analytics positions it well for future growth. The company has been strengthening pizza promotions for guests seeking meal solutions, along with enhancing breakfast lineups. Casey’s Rewards, the company's flagship loyalty program, has proven to be a vital tool for guest engagement.
By implementing technologies like the digital production planner and automated voice assistant, Casey's achieved a notable 1.6% reduction in same-store labor hours in the final quarter of fiscal 2024. This efficiency gain not only improves profitability but also enhances customer service, contributing to rising guest satisfaction scores.
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A Glimpse of Casey's Success
In the fourth quarter of fiscal 2024, Casey's demonstrated strength with a surge in Inside sales. The metric grew 11.9% year over year to nearly $1,257.4 million during the quarter. The growth was not just quantitative but qualitative as well, with Inside same-store sales witnessing an increase of 5.6%.
This was driven by a stellar performance in hot sandwiches and dispensed beverages in the prepared food and dispensed beverage category as well as non-alcoholic and alcoholic beverages in the grocery and general merchandise category. Prepared Food & Dispensed Beverage sales rose 13.6% to $356.9 million, while Grocery & General Merchandise sales increased 11.2% to $900.5 million during the quarter.
Strategically, Casey's has aggressively expanded its store footprint. In fiscal 2024, the company added 42 new stores and acquired 112 more, including a significant entry into Texas, marking its 17th state of operation. This dual approach of organic growth and acquisitions underscores Casey's commitment to broadening its market presence and capturing new growth opportunities. Casey's is ahead of its pace for adding at least 350 stores by the end of fiscal 2026.
Charting the Path Ahead
Casey’s business model, private-label offerings, expansion of its footprint and digitization endeavors are likely to support sales. The company estimates Inside same-store sales to increase between 3% and 5% in fiscal 2025. It expects fiscal 2025 EBITDA growth to be at least 8%.
Investors have recognized its potential, with shares of this Zacks Rank #3 (Hold) company advancing an impressive 20.3% in the past three months compared with the industry’s rise of 17.5%.
3 Stocks Looking Red Hot
Here, we have highlighted three better-ranked stocks, namely Vital Farms VITL, Sprouts Farmers Market SFM and Tractor Supply Company TSCO.
Vital Farms offers a range of produced pasture-raised foods. It currently sports a Zacks Rank #1 (Strong Buy). VITL has a trailing four-quarter average earnings surprise of 102.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 22.5% and 59.3%, respectively, from the year-ago reported numbers.
Sprouts Farmers, the renowned grocery retailer, currently sports a Zacks Rank #1. SFM has a trailing four-quarter earnings surprise of 9.2%, on average.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings implies growth of around 8% and 9.9%, respectively, from the year-ago reported numbers.
Tractor Supply Company, which operates as a rural lifestyle retailer, currently carries a Zacks Rank #2 (Buy). TSCO has a trailing four-quarter earnings surprise of 2.7%, on average.
The Zacks Consensus Estimate for Tractor Supply Company’s current financial-year sales and earnings calls for growth of around 3% and 2.5%, respectively, from the year-ago reported numbers.
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Tractor Supply Company (TSCO) : Free Stock Analysis Report
Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report
Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
Vital Farms, Inc. (VITL) : Free Stock Analysis Report
