Casey’s General Stores 4Q net income climbs 41 percent, boost dividend

Casey’s General Stores 4Q net income up 41 pct

ANKENY, Iowa — Casey’s General Stores Inc., the Midwest convenience store operator that is resisting a $1.9 billion takeover bid, said Tuesday its net income climbed 41 percent in its fiscal fourth quarter as revenue soared.

The results beat Wall Street expectations, and the company raised its quarterly dividend by almost 18 percent to 10 cents a share.

Its shares rose 15 cents to $36.08 in morning trading.

Casey’s has said an April buyout offer of $36 a share from Canada’s Alimentation Couche-Tard is too low. It has also sued its suitor, saying the Canadian company violated U.S. securities laws by manipulating Casey’s stock price during the takeover offer.

Facing resistance, Couche-Tard took its offer directly to Casey’s shareholders earlier this month and says the suit is without merit and will defend itself.

Casey’s operates about 1,500 convenience stores in the Midwest under the brands HandiMart, Just Diesel and Casey’s. Couche-Tard has nearly 6,000 stores in Canada and the U.S. under the Circle K and Couche-Tard banners.

In its earnings report, Casey’s said its net income rose to $21.9 million, or 43 cents per share, for the quarter that ended April 30, up from $15.6 million, or 31 cents per share, a year earlier. Revenue grew 33.5 percent to $1.18 billion from $883.4 million.

The company said without the cost of $6.9 million in legal and advisory fees relating to the unsolicted offer and other actions by Couche-Tard, it would have earned 51 cents a share in the quarter.

Analysts polled by Thomson Reuters expected the company to earn 43 cents per share for the quarter on revenue of $1.15 billion. Analysts typically exclude one-time items from their earnings estimates.

The company’s results were bolstered by strong margins from its products including gasoline, which it said it has been experiencing for the past three years.

“We believe there has been a shift in the competitive landscape throughout our marketing territory and expect this positive environment to continue,” CEO Robert J. Myers said in a news release.

Revenue at stores open at least a year — a key figure for retailers — rose 3.1 percent for grocery and other merchandise. That’s a key metric because it measures growth at existing businesses rather than new ones.

The company said price increases are helping the business and it continues to see a favorable cost environment for cheese. Revenue at stores open at least a year for prepared foods an fountain rose 5.3 percent in the quarter.

The company acquired 37 stores and built 18 new ones in the past year. It also changed 20 stores to a new design with larger coffee and fountain offerings and larger cooler capacity.

For the fiscal year, the company reported net income of $117 million, or $2.29 a share, up from $85.7 million, or $1.68 a share in the prior fiscal year.

Revenue slipped to $4.6 million from $4.7 million.

For the next fiscal year, the company said it hopes to increase revenue at stores open at least a year for grocery and other merchandise 6 percent, and to increase the figure for food and fountain sales to 8 percent. For gasoline, it hopes the figure will grow 1 percent.

The company boosted is dividend to 10 cents a share from 8.5 cents. The dividend will be paid on Aug. 16 to shareholders of record on Aug. 2.