Part I [Business](index=4&type=section&id=ITEM%201.%20Business) The company operates 2,904 convenience stores focused on prepared foods and fuel, recently expanding through the major acquisition of Fikes Wholesale - As of April 30, 2025, the Company operates **2,904 convenience stores** across 20 states, with approximately **71% located in areas with populations under 20,000**[13](index=13&type=chunk)[14](index=14&type=chunk) - On November 1, 2024, Casey's acquired Fikes Wholesale, adding **198 stores**, including its first locations in Alabama, Florida, and Mississippi, and its first fuel terminal in Waco, Texas[13](index=13&type=chunk) - Prepared food and grocery/general merchandise items, while representing about **34% of total revenue** over the last three fiscal years, have generated approximately **63% of the revenue less cost of goods sold**[28](index=28&type=chunk) - The Casey's Rewards loyalty program has grown to over **9 million members**, allowing customers to earn points for fuel discounts, Casey's Cash, or donations to local schools[31](index=31&type=chunk) - As of April 30, 2025, the company employed **23,338 full-time and 25,934 part-time team members**[42](index=42&type=chunk) Retail Fuel Operations Summary (FY2023-FY2025) | Fiscal Year | Gallons Sold (thousands) | Total Retail Fuel Revenue ($ thousands) | % of Total Revenue | Avg. Cents Per Gallon Margin | | :--- | :--- | :--- | :--- | :--- | | **2025** | 3,196,852 | $9,776,033 | 61.3% | 38.68¢ | | **2024** | 2,828,669 | $9,402,071 | 63.3% | 39.48¢ | | **2023** | 2,672,366 | $10,027,310 | 66.4% | 40.22¢ | [Risk Factors](index=9&type=section&id=ITEM%201A.%20Risk%20Factors) The company faces significant operational, regulatory, industry, and strategic risks, including cybersecurity, supply chain, and competition - A **cyber or data security incident** could lead to significant financial loss, litigation, and reputational damage[59](index=59&type=chunk)[60](index=60&type=chunk) - The business is exposed to **commodity price fluctuations**, particularly for cheese and proteins, which could adversely affect profitability[62](index=62&type=chunk) - Difficulties in **recruiting and retaining qualified team members**, especially drivers and hourly store staff, could materially impact operations[66](index=66&type=chunk)[67](index=67&type=chunk) - The **volatility of wholesale petroleum costs** significantly affects operating results, as fuel sales accounted for approximately 64% of total revenue[92](index=92&type=chunk) - The convenience store industry is **highly competitive**, with pressure from other convenience chains, supermarkets, and fast-food outlets[93](index=93&type=chunk) - The growth strategy faces risks related to **identifying and integrating acquisitions**, including potential difficulties with financing and operational systems[95](index=95&type=chunk) [Unresolved Staff Comments](index=16&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - Not applicable[103](index=103&type=chunk) [Cybersecurity](index=16&type=section&id=ITEM%201C.%20Cybersecurity) The company maintains a comprehensive cybersecurity program overseen by the Board's Audit Committee and has had no material incidents to date - The Board's **Audit Committee provides oversight of cybersecurity risk**, with regular updates from the CIO and CISO[104](index=104&type=chunk) - The company's information security program is based on recognized frameworks like the **NIST CSF and PCI DSS**[105](index=105&type=chunk) - A formal **Cybersecurity Incident Response Plan** and a cross-functional team are in place to manage potential security events[107](index=107&type=chunk) - To date, **no cybersecurity incidents have resulted in a material adverse effect** on the company's business, financial condition, or operations[108](index=108&type=chunk) [Properties](index=17&type=section&id=ITEM%202.%20Properties) The company owns the majority of its real estate, including its corporate headquarters, distribution centers, and most of its store locations - The company **owns its corporate headquarters, three distribution centers, and a fuel terminal**[109](index=109&type=chunk) - As of April 30, 2025, the company **leased the land and/or building for 245** of its store locations, with the remainder being owned[110](index=110&type=chunk) [Legal Proceedings](index=17&type=section&id=ITEM%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from the financial statement notes - The required information is **incorporated by reference from Note 10** to the Consolidated Financial Statements[111](index=111&type=chunk) [Mine Safety Disclosures](index=17&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) The company reports that this item is not applicable - Not applicable[112](index=112&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=18&type=section&id=ITEM%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Casey's common stock (NASDAQ: CASY) features a growing dividend and an active share repurchase program - The company's common stock trades on the Nasdaq Global Select Market under the symbol **CASY**[114](index=114&type=chunk) - **Dividends declared in fiscal 2025 totaled $2.00 per share**, up from $1.72 per share in fiscal 2024[116](index=116&type=chunk) - As of April 30, 2025, **$295.1 million remained available** under the company's $400 million share repurchase program[119](index=119&type=chunk) - **No shares of common stock were repurchased** during the fourth quarter ended April 30, 2025[118](index=118&type=chunk) [[Reserved]](index=19&type=section&id=ITEM%206.%20%5BReserved%5D) This item is not applicable - Not applicable[120](index=120&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=ITEM%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2025 revenue and net income grew significantly, driven by the Fikes acquisition, despite higher operating expenses and increased debt - **Store count grew by a net 246 stores** in fiscal 2025, from 2,658 to 2,904, primarily through acquisitions and new constructions[126](index=126&type=chunk) - **Operating expenses increased by 11.5% ($263.8M)**, with approximately 10% of the increase due to operating more stores and acquisition costs[135](index=135&type=chunk) - **Net cash provided by operating activities increased by $197.9M** to $1.09 billion in FY2025, driven by improved profitability[160](index=160&type=chunk) - The company used proceeds from **$1.1 billion in new long-term debt** to partially fund the Fikes acquisition[162](index=162&type=chunk) Fiscal 2025 vs. Fiscal 2024 Performance | Metric | Fiscal 2025 | Fiscal 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $15,940.9M | $14,862.9M | +7.3% | | Net Income | $546.5M | $502.0M | +8.9% | | Diluted EPS | $14.64 | $13.43 | +9.0% | | EBITDA (Non-GAAP) | $1,200.0M | $1,059.4M | +13.3% | FY2025 Same-Store Sales Growth | Category | Same-Store Sales Growth | | :--- | :--- | | Prepared food and dispensed beverage | +3.5% | | Grocery and general merchandise | +2.3% | | Fuel gallons sold | +0.1% | [Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=ITEM%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are interest rate fluctuations on its variable-rate debt and volatility in fuel prices - The primary market risk exposure is from **interest rate changes on floating-rate long-term debt**[180](index=180&type=chunk) - A **100-basis-point (1%) increase in interest rates** would result in an approximate **$10.2 million annualized increase in interest expense**[180](index=180&type=chunk) - The company uses **futures contracts to economically hedge price risk** on bulk fuel stored in terminals and pipelines[181](index=181&type=chunk) [Financial Statements and Supplementary Data](index=29&type=section&id=ITEM%208.%20Financial%20Statements%20and%20Supplementary%20Data) The audited financial statements reflect significant growth due to the Fikes acquisition, with an unqualified audit opinion from KPMG LLP - The independent auditor, KPMG LLP, issued an **unqualified opinion** on the consolidated financial statements and internal controls[184](index=184&type=chunk)[201](index=201&type=chunk) - Critical audit matters identified were the **valuation of merchandise inventory** and the **fair value of real property acquired** in the Fikes business combination[189](index=189&type=chunk)[194](index=194&type=chunk) - The **Fikes acquisition on Nov 1, 2024, for a purchase price of $1.17 billion**, resulted in the recognition of **$577.7 million in goodwill**[241](index=241&type=chunk)[242](index=242&type=chunk)[243](index=243&type=chunk) - The company operates as a **single reportable segment**, with the CODM assessing performance based on consolidated profitability metrics[297](index=297&type=chunk)[298](index=298&type=chunk) Consolidated Balance Sheet Highlights (as of April 30) | Account | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | Total Current Assets | $1,012,853 | $829,854 | | Net Property and Equipment | $5,413,244 | $4,669,357 | | Goodwill | $1,244,893 | $652,663 | | **Total Assets** | **$8,208,118** | **$6,347,433** | | Total Current Liabilities | $1,101,693 | $953,466 | | Long-Term Debt & Leases | $2,413,620 | $1,582,758 | | **Total Liabilities** | **$4,699,448** | **$3,332,052** | | **Total Shareholders' Equity** | **$3,508,670** | **$3,015,381** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=52&type=section&id=ITEM%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[301](index=301&type=chunk) [Controls and Procedures](index=52&type=section&id=ITEM%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls were effective, excluding the recently acquired Fikes business from the assessment - The CEO and CFO concluded that **disclosure controls and procedures were effective** as of April 30, 2025[302](index=302&type=chunk) - Management's report on internal control over financial reporting concluded that **controls were effective** as of April 30, 2025[307](index=307&type=chunk) - The assessment of internal controls **excluded the Fikes acquisition**, which is permitted by the SEC for recent business combinations[306](index=306&type=chunk) [Other Information](index=52&type=section&id=ITEM%209B.%20Other%20Information) The company reports that this item is not applicable - Not applicable[309](index=309&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=52&type=section&id=ITEM%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company reports that this item is not applicable - Not applicable[310](index=310&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=53&type=section&id=ITEM%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information on directors, officers, and governance, including the Code of Ethics, is incorporated by reference from the Proxy Statement - Detailed information regarding directors, executive officers, and corporate governance is **incorporated by reference** from the company's forthcoming Proxy Statement[312](index=312&type=chunk) - The Company has adopted a **Financial Code of Ethics** and a **Code of Conduct and Ethics**, which are available on its website[313](index=313&type=chunk) [Executive Compensation](index=53&type=section&id=ITEM%2011.%20Executive%20Compensation) Details regarding executive and director compensation are incorporated by reference from the company's forthcoming Proxy Statement - All information related to executive and director compensation is **incorporated by reference** from the company's forthcoming Proxy Statement[315](index=315&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=53&type=section&id=ITEM%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership by major shareholders and management is incorporated by reference from the Proxy Statement - Information on security ownership and equity compensation plans is **incorporated by reference** from the company's forthcoming Proxy Statement[316](index=316&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=53&type=section&id=ITEM%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Disclosures on related party transactions and director independence are incorporated by reference from the Proxy Statement - Disclosures on related transactions and director independence are **incorporated by reference** from the company's forthcoming Proxy Statement[317](index=317&type=chunk) [Principal Accountant Fees and Services](index=53&type=section&id=ITEM%2014.%20Principal%20Accountant%20Fees%20and%20Services) Details on fees paid to the principal accountant are incorporated by reference from the company's Proxy Statement - Information on principal accountant fees and services is **incorporated by reference** from the company's forthcoming Proxy Statement[318](index=318&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=54&type=section&id=ITEM%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements and key exhibits filed, including acquisition and debt agreements - This section lists all **financial statements and exhibits** filed with the Form 10-K[321](index=321&type=chunk) - Key exhibits include the **Fikes acquisition agreement, various debt agreements, executive compensation plans, and Sarbanes-Oxley certifications**[320](index=320&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk) [Form 10-K Summary](index=56&type=section&id=ITEM%2016.%20Form%2010-K%20Summary) The company reports that this item is not applicable - Not applicable[323](index=323&type=chunk)

Core Insights - Casey's General Stores experienced a 13% increase in share price following the announcement of strong fourth-quarter earnings, with EBITDA and earnings per share growth of 20% and 12% respectively, surpassing analysts' expectations [1][2] - The company announced a 14% increase in dividends, contributing to the rise in share price [2] - Casey's operates approximately 2,900 locations across 20 states, having expanded significantly since its inception in Iowa, and has shown a remarkable growth of 258 times since 1990 [3] Expansion and Growth Strategy - Management plans to grow the store count by 9% in 2025, indicating ongoing expansion efforts [5] - The company employs a mergers and acquisitions strategy focused on acquiring convenience stores lacking a strong food presence, subsequently enhancing profitability by introducing Casey's kitchen offerings [6] Valuation and Performance Comparison - Despite recent successes, Casey's valuation remains reasonable at 17 times cash from operations, especially when compared to Domino's Pizza, which has a higher valuation of 23 times cash from operations despite lower profit growth [7]

Market Overview - Wall Street experienced a strong recovery in May, regaining most losses from early April due to tariff announcements by President Trump, but volatility persists as the impact of tariffs on the economy remains unclear [1][4][9] - The Federal Reserve has not indicated plans to resume rate cuts despite recent cooling inflation, contributing to market uncertainty [2][5] Economic Indicators - U.S. job growth slowed significantly in May, with nonfarm payrolls increasing by only 139,000 and private payrolls rising by just 37,000, raising concerns about the economy's health [6] Dividend-Paying Stocks - In light of ongoing market uncertainty, investing in dividend-paying stocks is recommended as they tend to be more stable and reliable during economic fluctuations [7] - Four notable dividend-paying stocks include: - **Casey's General Stores, Inc. (CASY)**: Operates 2,893 convenience stores across 17 states, with a dividend of $0.57 per share and a yield of 0.46% [8][10] - **Utz Brands, Inc. (UTZ)**: Manufactures a variety of salty snacks, declaring a dividend of $0.06 per share with a yield of 1.75% [11][12] - **Sun Communities, Inc. (SUI)**: Focuses on manufactured housing communities, announcing a dividend of $1.04 per share and a yield of 3.01% [13][14] - **EOG Resources, Inc. (EOG)**: Engaged in oil and natural gas exploration, with a dividend of $1.02 per share and a yield of 3.41% [15][16]

Core Viewpoint - Casey's General Stores has shown significant growth, with stock prices increasing over 200% in the last four years, and has the potential for further triple-digit percentage increases in the future [1] Financial Performance - In FQ4, Casey's reported net revenue of $3.99 billion, reflecting a year-over-year increase of 10.8%, driven by a 9.2% rise in store count and a 1.7% increase in inside comparable sales [9] - Inside comparable sales increased by 7.4% over two years, while fuel gallon comps were flat at 0.1%, but operating profit increased by 21.45% due to improved margins [10][11] - EBITDA rose by 20.1%, net income increased by 13%, and GAAP earnings grew by 12.4% [11] Growth and Guidance - The company anticipates continued growth into FY2026, forecasting 11% EBITDA growth at the midpoint and inside sales comps near 3.5% [12] - The dividend yield is approximately 0.45%, with a reliable payment history and an expected annual increase, having risen for 26 consecutive years [5][6] Operational Quality and Acquisitions - Casey's halted share buybacks in F2025 to prepare for the acquisition of Fikes, which is already contributing positively to results [2][3] - The balance sheet shows increased current assets by 22% and total assets by 29%, leading to a 16% increase in shareholder equity, which stands at over $3.5 billion [8] Analyst Sentiment - Analysts maintain a Moderate Buy rating for Casey's, with a consensus price target of $434.92, indicating a potential downside of 12.6% from the current price [9][14] - The overall sentiment among analysts is positive, with expectations for continued stock price increases following the recent quarterly results and guidance updates [13]

Core Insights - Casey's General Stores ended its fiscal year positively, exceeding analyst expectations with strong fourth-quarter earnings [2][7] - The company is rapidly expanding, nearing 3,000 stores across 19 states, with significant acquisitions and new site developments [3][6] Financial Performance - Casey's reported a net income of $98.3 million for the quarter ended April 30, up from $87 million in the prior year, translating to $2.63 per share compared to $2.34 per share [7] - Revenue increased by 11% to $3.99 billion, surpassing estimates of approximately $3.93 billion [8] - Inside same-store sales rose by 1.7%, driven by strong performance in bakery and prepared food categories [8][11] Expansion Strategy - The company plans to open at least 80 new stores in fiscal 2026, aiming for a total of approximately 500 new stores over three years [6] - The acquisition of Fikes Wholesale for $1.145 billion included 198 stores and a fuel terminal, enhancing Casey's operational capacity in Texas [4][5] Market Position - Casey's operates primarily in small towns, with about two-thirds of its stores located in areas with populations of 20,000 or fewer [9] - The company has a strong balance sheet, owning nearly all its assets, which contributed to a stock value increase of over 10% following the positive results [10]

Core Insights - Casey's General Stores, Inc. (CASY) reported strong fourth-quarter fiscal 2025 results, with both revenue and earnings exceeding expectations and showing year-over-year growth [1][3]. Financial Performance - The company achieved quarterly earnings of $2.63 per share, surpassing the Zacks Consensus Estimate of $1.93, marking a 12.4% increase from $2.34 in the prior-year quarter [3]. - Total revenues reached $3,992.8 million, exceeding the Zacks Consensus Estimate of $3,969 million, and reflecting a 10.9% increase from $3,600 million in the same period last year [3]. - Inside sales increased by 12.4% year over year to $1,413.6 million, driven by strong performances in bakery, prepared foods, and beverages [4]. Margin and Expense Analysis - Gross profit rose to $926 million from $798.1 million in the same quarter last year, with gross margin expanding by 100 basis points to 23.2% [5]. - EBITDA increased by 20.1% year over year to $263 million, with an EBITDA margin of 6.6%, surpassing expectations [6]. - Operating expenses rose by 14.5% to $663 million, primarily due to the operation of 246 additional stores [7]. Segment Performance - Prepared Food & Dispensed Beverage sales increased by 9.7% year over year to $391.7 million, although same-store sales decreased by 1.5% [8]. - Grocery & General Merchandise sales grew by 13.5% to $1,021.9 million, with a margin increase of 40 basis points to 34.8% [9]. - Fuel sales rose by 7.1% year over year to $2,438.9 million, with fuel gallons sold increasing by 17.8% [10]. Financial Position - As of April 30, 2025, the company operated 2,904 stores, with cash and cash equivalents of $326.7 million and long-term debt of $2.41 billion [11]. - The company did not repurchase any shares during the fiscal quarter and has approximately $295 million available under its current buyback authorization [11]. Dividend and Future Outlook - In June, the management increased the quarterly dividend by 14% to 57 cents per share, marking the 26th consecutive year of dividend increases [12]. - For fiscal 2026, management expects EBITDA growth of 10% to 12% and anticipates total operating expenses to increase by 8% to 10% [13]. - The company projects inside same-store sales growth of 2-5% and plans to open about 80 stores in fiscal 2026 [14].

Until last year, I was unfamiliar with Casey's General Stores (NASDAQ: CASY ), a dividend growth stock that seemed to be of the highest-quality. And this is apparent by their expensive valuation. With a current forward P/E over 30x, above their 5-year average, theContributing analyst to the iREIT+Hoya Capital investment group. The Dividend Collectuh is not a registered investment professional nor financial advisor and these articles should not be taken as financial advice. This is for educational purposes o ...

Financial Data and Key Metrics Changes - Fiscal year 2025 saw diluted earnings per share increase by 9% to $14.64, with net income reaching a record $547 million and EBITDA at $1.2 billion, up 13% from the previous year [8][19] - Total inside sales grew by 10.9%, with same-store sales up 2.6%, while prepared food and dispensed beverage sales increased by 10.3% [9][13] - Inside margin expanded by 50 basis points year-over-year to 41.5%, driven by effective vendor partnerships [9][10] Business Line Data and Key Metrics Changes - Total prepared food and dispensed beverage sales rose by 9.7% to $392 million, while grocery and general merchandise sales increased by 13.5% to $1.02 billion [13][14] - Same-store prepared food and beverage sales were up 1.5%, with an average margin of 57.8%, despite a 30 basis point decline from the previous year [14] - Same-store grocery and general merchandise sales increased by 1.8%, with an average margin of 34.8%, up 40 basis points year-over-year [15] Market Data and Key Metrics Changes - Fuel gross profit increased by 11%, with total fuel gallons sold up 13% and an average fuel margin of 38.7 cents per gallon [10][19] - Retail fuel sales rose by $162 million, primarily due to a 17.8% increase in total gallons sold, despite a 9% decline in average retail price [17] Company Strategy and Development Direction - The company emphasized a two-pronged approach of building and acquiring stores, achieving the largest store growth year in its history with 35 new builds and 235 units acquired [7][8] - The strategic plan focuses on accelerating food business, growing unit numbers, and enhancing operational efficiency, with a target of opening at least 80 stores in fiscal year 2026 [24][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model's strength and durability, anticipating EBITDA growth of 10% to 12% in fiscal year 2026 [21] - The company expects same-store sales growth of 2% to 5% and operating expenses to increase by approximately 8% to 10% [21][22] Other Important Information - The effective tax rate for the quarter was 23%, compared to 22.4% in the prior year, with net interest expense rising to $27.9 million due to financing associated with acquisitions [19][18] - The company plans to allocate approximately $125 million for share repurchases in fiscal year 2026, funded entirely by operating cash flow [21][85] Q&A Session Summary Question: Fuel margins performance and synergies - Management noted that fuel margins exceeded expectations due to effective pricing management and improved procurement capabilities [31][32] Question: Same-store sales outlook for fiscal year 2026 - Management expressed comfort with the guidance range, attributing conservatism to current economic conditions and customer behavior [42][43] Question: Impact of illicit vape on sales - Management acknowledged a negative impact from illicit vape but noted strong growth in nicotine alternatives [52][53] Question: Operating expenses guidance - Management indicated that operating expenses would see mid-teen increases in the first half of fiscal year 2026, primarily due to the integration of acquired stores [60][62] Question: Share buyback strategy - Management clarified that the $125 million share buyback would be funded by operating cash flow, with no debt draw required [81][85]

Financial Data and Key Metrics Changes - Fiscal year 2025 saw diluted earnings per share reach $14.64, a 9% increase from the prior year [9] - The company generated a record $547 million in net income and $1.2 billion in EBITDA, marking a 13% increase from the previous year [9] - Total inside sales grew by 10.9% during the year, with inside same-store sales up 2.6% [10] - Total operating expenses increased by 14.5% or $84 million in the fourth quarter, with approximately 12% attributed to unit growth [19] Business Line Data and Key Metrics Changes - Total prepared food and dispensed beverage sales grew by 10.3%, with same-store sales up 3.5% [10] - Total grocery and general merchandise sales increased by 11.2%, with same-store sales up 2.3% [10] - Fuel gross profit rose by 11%, with total fuel gallons sold up 13% [11] Market Data and Key Metrics Changes - Same-store fuel gallons sold increased by 0.1% with a fuel margin of 37.6¢ per gallon [17] - Retail fuel sales rose by $162 million in the fourth quarter, primarily due to a 17.8% increase in total gallons sold [19] Company Strategy and Development Direction - The company aims to open at least 80 stores in fiscal year 2026, contributing to a total of approximately 500 stores over a three-year strategic plan [24] - The strategic plan focuses on accelerating the food business, growing the number of units, and enhancing operational efficiency [27] - The company is committed to improving operating expense management and generating more free cash flow [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model's strength and durability, indicating the ability to succeed in various economic climates [12] - The company expects EBITDA to increase between 10% to 12% in fiscal year 2026, with inside same-store sales projected to rise by 2% to 5% [23] - Management acknowledged the impact of external factors, including inflation and consumer behavior, on sales outlook [46][62] Other Important Information - The effective tax rate for the quarter was 23%, compared to 22.4% in the prior year [21] - The company plans to allocate approximately $125 million for share repurchases in fiscal year 2026 [23][88] Q&A Session Summary Question: Fuel margins performance and expectations - Management noted that fuel margins exceeded expectations due to effective pricing management and improved procurement capabilities [34] Question: Guidance and synergies from acquisitions - Management discussed the expected headwinds from acquisitions and the anticipated synergies, particularly in fuel pricing and overhead rationalization [36] Question: Inside sales performance and drivers - Management acknowledged that inside sales fell slightly short of expectations due to a softer start in the fiscal year and adverse weather conditions [54] Question: Impact of illicit vape on sales - Management confirmed that illicit vape has negatively impacted the vape category, but noted growth in nicotine alternatives [59] Question: Consumer behavior and promotional strategies - Management indicated that consumer traffic remains stable, with targeted promotions aimed at different income cohorts [61][63] Question: Operating expenses guidance - Management provided insights into the expected cadence of operating expenses, highlighting the impact of acquisitions on the first half of fiscal year 2026 [66] Question: Share buyback strategy - Management clarified that the planned share buybacks would be funded through operating cash flow, with no additional debt drawn [88]

Company Overview - Casey's operates approximately 2,900 stores [6] and is a staple for millions of Americans [6] - The company has ~$19 billion in sitone nenc eor esv T tl E t i V l T t l T M b G T i Y t to a n e r p r s e a e o a e a m e m e r s u e s r a n s a c o n s p e r e a r u O [6] - Casey's is the 3rd largest convenience store chain and 5th largest pizza chain in the U S [6] - Approximately 75% of towns between 500 and 20,000 in Casey's distribution center footprint do not have a Casey's location [53] Financial Performance and Strategy - Casey's aims to deliver top quintile EBITDA growth of 8-10% [25] - The company targets free cash flow of approximately $1 25 billion through FY2026 [28] - Casey's has consistently delivered 8+% EBITDA growth over the short, medium, and long-term horizon [34] - In FY25, Casey's generated $585 million in free cash flow, compared to $136 million in FY19 [77] - Return on invested capital (ROIC) improved to 11 5% in FY25, up approximately 240 bps from FY19 [77] Strategic Differentiators - Approximately 70% of Casey's inside transactions do not include fuel [18] - Casey's has reduced the sales mix of the tobacco category on acquired stores by 450 bps [22] - Strategic investments in digital and food have resulted in a 41 5% inside gross margin, which is +750 bps higher than the industry average [22]