Casey’s General Stores, Inc. — FY2024 Form 10-K
Reporting period: Fiscal year ended April 30, 2024; comparison is primarily with the year ended April 30, 2023. Although the request labels the period “2023 Q4,” this filing is an annual report for FY2024, not a quarterly filing. Unless otherwise noted, dollar amounts below are in millions.
Business context
Casey’s operated 2,658 convenience stores in 17 states, primarily in the Midwest, with fuel and in-store sales. It added 42 new stores, acquired 112, opened six stores acquired in earlier periods, and closed 22. Management’s three-year strategic plan focuses on growing store count, accelerating prepared food, and improving operational efficiency.
Financial performance and liquidity
| Metric | FY2024 | FY2023 | Change |
|---|---|---|---|
| Total revenue | $14,862.9 | $15,094.5 | Down 1.5% |
| Revenue less cost of goods sold | $3,347.9 | $3,072.4 | Up 9.0% |
| Net income | $502.0 | $446.7 | Up 12.4% |
| Diluted EPS | $13.43 | $11.91 | Up 12.8% |
| Net cash from operations | $893.0 | $882.0 | Up $11.0 |
| Cash and cash equivalents at year-end | $206.5 | $378.9 | Down $172.4 |
- Revenue mix: fuel $9,402.1 million, grocery and general merchandise $3,727.4 million, prepared food and dispensed beverages $1,461.6 million, and other $271.8 million. Fuel remained the largest category at 63.3% of revenue.
- Prepared food and dispensed beverage revenue rose 10.5%; grocery and general merchandise rose 8.2%. Fuel revenue fell 6.2%, mainly as average retail fuel price per gallon declined 11.5%, partly offset by 5.8% more gallons sold.
- Revenue less cost of goods sold was 22.5% of revenue, versus 20.4% in FY2023. Prepared-food margin was 58.7% versus 56.6%; grocery margin was 34.1% versus 33.6%; fuel margin was 11.9% versus 10.7%. Fuel margin per gallon declined to 39.5 cents from 40.2 cents.
- Operating expenses increased 8.0% to $2,288.5 million; depreciation and amortization increased 11.7% to $349.8 million. Net interest expense was $53.4 million, up 3.1%. The effective tax rate declined to 23.5% from 24.0%.
- Operating cash flow was $893.0 million. Property and equipment purchases were $522.0 million; acquisition payments were $330.0 million. Cash used in investing activities totaled $825.4 million. Operating cash flow less property and equipment purchases was approximately $371.0 million, before acquisitions and other investing items.
- Long-term debt and finance lease obligations totaled $1,635.9 million, including $237.5 million outstanding on the variable-rate term loan; the revolving credit facility had no borrowings. The company reported an $850 million committed revolving facility and a $50 million bank line, also with no borrowings.
- Current assets were $829.9 million and current liabilities $953.5 million; the current ratio was 0.87, compared with 0.99 a year earlier. Management said cash, operating cash flow, and available credit were expected to meet working-capital needs and planned growth.
- FY2024 dividends declared were $1.72 per share. The company repurchased $104.9 million of shares during the year, with $295.1 million remaining under its $400 million authorization.
Changes, outlook, and notable items
- Despite lower total revenue, higher inside-store and fuel profitability lifted net income 12.4% and adjusted EBITDA 11.1% to $1,065.8 million. The filing attributes the revenue decline chiefly to lower fuel prices and notes higher operating costs.
- FY2023 operating expenses included a one-time $15.3 million benefit from resolving a legal matter; this makes year-over-year expense comparisons less directly comparable.
- Management expects fuel-market volatility to continue through FY2025. It believes fuel margins may remain above historical levels for the foreseeable future, but says margins can fluctuate significantly and unpredictably. The filing provides no specific earnings or revenue guidance.
- Casey’s reported 170 EV charging stations at 37 stores across 12 states and described a selective expansion strategy based on local demand. Almost all stores offer fuel blended with at least 10% ethanol; 43% offer biodiesel.
- Key risks include fuel-price and fuel-margin volatility, food and commodity inflation, labor availability and wage costs, distribution interruptions, cyber and data-security incidents, food safety, intense competition, regulatory changes, and acquisition integration. The company also faces possible lower long-term fuel demand from efficiency gains and alternative vehicles.
- Two collective wage-and-hour lawsuits allege Store Managers were misclassified as exempt employees; approximately 1,400 people remained opted in to one case and 550 to the related case. Discovery was underway. The company disputes the allegations and says provisions have been made for probable losses; it considers reasonably possible excess losses not material.
- The company reported effective internal controls and received unqualified audit opinions on its financial statements and internal control. The auditor identified store merchandise-inventory quantities as a critical audit matter; no material cybersecurity incident was reported as of the filing date.
Important facts for investors to verify
- Whether prepared-food and grocery sales growth and improved gross margins persist as costs, pricing, and consumer demand change.
- Fuel gallons, cents-per-gallon margin, and fuel-market volatility, including management’s FY2025 commentary.
- Acquisition returns and integration progress, capital spending, and the effect of store growth on cash generation and leverage.
- Available liquidity, variable-rate debt exposure, debt maturities, and compliance with debt covenants.
- Developments in the Store Manager lawsuits and any changes to estimated legal or self-insurance liabilities.