Core Insights - Casey's General Stores, Inc. reported second-quarter earnings of $5.53 per share, exceeding the analyst consensus of $5.18, with revenue of $4.51 billion, slightly above the $4.5 billion estimate, and a net income increase of 14% year-over-year to $206.3 million [1][2] Financial Performance - Inside same-store sales increased by 3.3%, or 7.5% on a two-year basis, with inside margins improving to 42.4% [2] - Inside gross profit rose by 13.5% to $703.4 million, while fuel gross profit increased by 20.9% to $377.4 million, supported by a 0.8% rise in same-store gallons and a fuel margin of 41.6 cents per gallon [2] Expansion and Outlook - The company operated 2,921 stores as of October 31, marking a nearly 9% increase from the previous year, including 16 newly built locations and 26 acquired stores [3] - Casey's raised its fiscal 2026 outlook, now expecting EBITDA growth of 15% to 17%, with inside same-store sales projected to rise by 3% to 4% and margins between 41% and 42% [3]

Core Viewpoint - Casey's General Stores' stock price is expected to trend higher due to strong growth prospects, healthy cash flow, and broad market support, despite current valuation concerns [2][3]. Group 1: Financial Performance - Casey's General Stores reported a solid fiscal Q2 with net revenue of $4.51 billion, reflecting a year-over-year growth of 14.2%, driven by new-store growth and comparable store sales [5]. - Inside sales increased by 13%, with inside comparable sales up by 3.3% and fuel gallon comparable sales up by 0.8% [6]. - The company achieved an EBITDA increase of 17.5%, with net income and GAAP earnings rising by 14%, resulting in a GAAP EPS of 33 cents, which exceeded market expectations by 630 basis points [7]. Group 2: Cash Flow and Capital Returns - Casey's generates substantial free cash flow, supported by operational efficiency and a strong balance sheet, with total liabilities at 1.25 times equity and rising shareholder equity [8]. - Shareholder equity increased by 8% year-to-date, alongside dividend payments and share buybacks, indicating a commitment to returning value to shareholders [8]. Group 3: Market Support - The stock is trading at approximately 10 times its 2035 earnings outlook, suggesting a potential 100% upside in stock price over the coming years, supported by institutional and analyst backing [3]. - The overall market sentiment is positive, with a tendency toward accumulation of Casey's stock, which is expected to drive further price appreciation [3].

Core Viewpoint - Casey's General Stores is a prominent player in the convenience store sector, maintaining a "Sector Perform" rating from RBC Capital with a raised price target reflecting confidence in its future performance [2][5]. Financial Performance - For the quarter ending in October 2025, Casey's reported a revenue of $4.51 billion, representing a 14.2% year-over-year increase, although it was slightly below the Zacks Consensus Estimate of $4.55 billion, resulting in a revenue surprise of -1.03% [2][5]. - The company's earnings per share (EPS) for the quarter were reported at $5.53, exceeding the Zacks Consensus Estimate of $4.92 by 12.4%, marking an improvement from the $4.85 EPS reported in the same quarter last year [3][5]. - Over the past four quarters, Casey's has consistently surpassed consensus EPS estimates, indicating strong earnings performance [3]. Stock Performance - The current stock price of Casey's is $560, reflecting a slight decrease of approximately 0.58% or $3.24, with fluctuations between a low of $538.55 and a high of $569.39 during the day [4]. - Over the past year, the stock has reached a high of $573.76 and a low of $372.09, with a market capitalization of approximately $20.82 billion, solidifying its position in the retail convenience store industry [4].

Core Insights - Casey's General Stores, Inc. (CASY) reported second-quarter fiscal 2026 results with earnings per share of $5.53, exceeding the Zacks Consensus Estimate of $4.92, marking a 14% increase from $4.85 in the prior-year quarter. However, total revenues of $4,506.1 million fell short of the estimate of $4,553 million, although this figure represents a 14.2% increase from $3,946.8 million in the year-ago period [3][10]. Sales Performance - Total inside sales increased by 13% year over year to $1.66 billion, with inside same-store sales rising 3.3%, compared to a 4% increase in the previous year. This growth was driven by strong performance in prepared food and dispensed beverages, including whole pizzas and hot sandwiches, as well as robust sales in non-alcoholic beverages [4][10]. - Fuel sales rose 11.3% year over year to $2.69 billion, with fuel gallons sold increasing by 16.8% to 906.7 million. The fuel margin improved slightly to 41.6 cents per gallon from 40.2 cents in the prior-year period [11]. Margin and Expense Analysis - Gross profit increased to $1.12 billion, up 17% year over year, with gross margin expanding by 60 basis points to 24.9%. Inside gross profit rose 13.5% year over year to $703.4 million, with an inside margin of 42.4%, up about 20 basis points from the prior-year period [5][6]. - Operating expenses increased by 16.7% to $711.6 million, primarily due to operating 236 additional stores compared to the previous year. Same-store employee expenses accounted for roughly 2% of the increase, driven by higher labor rates [7]. Segment Performance - Prepared Food & Dispensed Beverage sales rose 12% year over year to $467.8 million, with same-store sales increasing by 4.8%. The margin for this segment declined by 10 basis points to 58.6% [8]. - Grocery & General Merchandise sales increased by 13.4% to $1.19 billion, surpassing estimates, with same-store sales advancing by 2.7%. The margin for this segment expanded by 40 basis points to 36% [9]. Financial Overview - As of October 31, 2025, Casey's operated 2,921 stores, with cash and cash equivalents of $492 million, long-term debt of $2.35 billion, and shareholders' equity of $3.81 billion. The company repurchased approximately $31 million of shares during the quarter [12]. - A quarterly dividend of 57 cents per share was declared, payable on February 13, 2026, continuing the company's track record of dividend payments [13]. Future Outlook - For fiscal 2026, management expects EBITDA growth of 15-17%, an increase from the previously mentioned 10-12%. Total operating expenses are anticipated to rise by 8-10%, with plans to open 80 new stores [14][15].

Group 1 - Casey's General Stores, Inc. (CASY) is a convenience store chain that has shown consistent growth and is rated as a quality and bullish hold by analysts [1] - The investment group BAD BEAT Investing, led by Quad 7 Capital, has a track record of providing investment opportunities and has been predominantly long since May 2020 [1] - BAD BEAT Investing focuses on short- and medium-term investments, income generation, special situations, and momentum trades, aiming to educate investors on proficient trading [1] Group 2 - The investment group offers various benefits, including well-researched trade ideas, chat rooms, daily analyst summaries, and options trading education [1] - Analysts within the group have a beneficial long position in CASY, indicating confidence in the stock's performance [1]

Core Insights - Casey's General Stores, Inc. (CASY) is recognized as a growing convenience store chain with a maintained bullish hold rating on its stock [1] - BAD BEAT Investing, led by Quad 7 Capital, has a strong track record in providing investment opportunities and focuses on both long and short trades [1] - The investment group emphasizes educating investors on market dynamics and offers extensive research and trading tools [1] Company Overview - Casey's General Stores operates as a convenience store chain and has been previously traded with positive growth prospects [1] - The company is part of a broader investment strategy that includes short- and medium-term investments, income generation, and momentum trades [1] Investment Strategy - BAD BEAT Investing aims to teach investors to become proficient traders through a structured playbook and high-quality research [1] - The investment group provides weekly trade ideas, chat room access, and daily analyst upgrade/downgrade summaries to its members [1]

Financial Data and Key Metrics Changes - Diluted EPS was $5.53 per share, and net income reached $206 million, both reflecting a 14% increase from the prior year [8][15] - Total revenue for the quarter was $4.51 billion, an increase of $559 million, or 14.2% from the prior year, driven by higher inside sales and fuel gallons sold [11][15] - EBITDA for the quarter was $410 million, a 17.5% increase from the prior year [15] Business Line Data and Key Metrics Changes - Same store sales increased by 3.3% for the second quarter, or 7.5% on a two-year stack basis, with an average margin of 42.4% [9] - Prepared food and dispensed beverage sales rose by $50 million to $468 million, an increase of 12% [11] - Grocery and general merchandise sales increased by $141 million to $1.19 billion, an increase of 13.4% [11] - Same store grocery and general merchandise sales were up 2.7%, or 6.4% on a two-year stack basis, with an average margin of 36% [10] Market Data and Key Metrics Changes - Same store gallons sold were up 0.8%, with a fuel margin of 41.6 cents per gallon [10] - The Midcontinent region saw an approximate 2% decline in fuel gallons sold, indicating market share growth for the company [10] Company Strategy and Development Direction - The company is focused on balancing profitability and volume, maintaining a consistent offer to guests [25] - The strategic plan is nearing completion, with expectations to continue gaining market share [18] - The company is committed to small tuck-in acquisitions while maintaining high asset quality standards [44] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer behavior is becoming more discerning, with a focus on value propositions [86] - The company expects a sequential deceleration in EBITDA growth in the second half due to higher prior year comparisons [42] - Management remains optimistic about the prepared food proposition, which is seen as a strong value relative to competitors [86] Other Important Information - The board of directors maintained the quarterly dividend at $0.57 per share and increased share repurchase expectations to approximately $200 million for the fiscal year [16] - The company is approximately 80% hedged for cheese prices for the next four quarters [64] Q&A Session Summary Question: Can you talk about the sustainability of fuel performance? - Management stated that their consistent approach to balancing profitability and volume has contributed to their success, and they expect seasonal lower margins in the winter [25][26] Question: Can you elaborate on the increase in same store operating expenses? - Management confirmed that full-year expectations for operating expenses remain unchanged, with a focus on maintaining efficiency while meeting demand [27][29] Question: What impact will SEFCOS stores have on margins as they roll into the comp base? - Management acknowledged that SEFCOS stores currently have lower margins but expect improvements as they are rebranded and integrated into the company [34][35] Question: Can you provide insights on the guidance for EBITDA growth in the second half? - Management indicated that the strong first half results will not be replicated in the second half due to higher prior year comparisons, but overall performance remains on plan [42] Question: How is the company addressing competition from private convenience stores? - Management expressed confidence in their ability to compete effectively, highlighting their differentiated offerings and strong performance in competitive markets [78]

Financial Data and Key Metrics Changes - Diluted EPS finished at $5.53 per share, and net income was $206 million, both representing a 14% increase from the prior year [6][14] - The company generated $410 million in EBITDA, a 17.5% increase from the prior year [6][14] - Total revenue for the quarter was $4.51 billion, an increase of $559 million, or 14.2% from the prior year [9][14] - Gross profit was $1.12 billion, an increase of $163 million, or 17% from the prior year [10][14] Business Line Data and Key Metrics Changes - Same store sales were up 3.3% for the second quarter, or 7.5% on a two-year stack basis, with an average margin of 42.4% [7] - Same store prepared food and dispensed beverage sales increased by 4.8%, or 10.3% on a two-year stack basis, with an average margin of 58.6% [7] - Same-store grocery and general merchandise sales were up 2.7%, or 6.4% on a two-year stack basis, with an average margin of 36%, an increase of approximately 40 basis points from the prior year [8] Market Data and Key Metrics Changes - Same-store gallons sold were up 0.8%, with a fuel margin of 41.6 cents per gallon [8] - The Midcontinent region saw an approximate 2% decline in fuel gallons sold, indicating continued market share growth for the company [8] Company Strategy and Development Direction - The company is focused on balancing profitability and volume, with a strong emphasis on store execution and guest engagement [21] - The strategic plan is nearing completion, with expectations to continue gaining market share and enhancing the value proposition for customers [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to compete effectively in a challenging environment, noting that consumer behavior is becoming more discerning [72] - The company expects a sequential deceleration in EBITDA growth in the second half of the fiscal year due to higher prior year comparisons and the integration of recent acquisitions [33] Other Important Information - The board of directors voted to maintain the quarterly dividend at $0.57 per share, with share repurchases expected to total approximately $200 million for the fiscal year [15] - The company is approximately 80% hedged for cheese prices for the next four quarters, ensuring favorable pricing stability [52] Q&A Session Summary Question: Can you talk about the sustainability of fuel performance? - Management indicated that their consistent approach to balancing profitability and volume has contributed to their success, with a focus on store traffic driving fuel sales [21][22] Question: What impact will SEFCOS stores have on margins? - Management acknowledged that SEFCOS stores currently carry lower margins but expect improvements as they are rebranded and integrated into the Casey's model [27][28] Question: What are the drivers behind the updated EBITDA guidance? - Management clarified that the strong first half results will not be replicated in the second half due to higher prior year comparisons and the integration of FICOS [33] Question: How is the company addressing competition from private convenience stores? - Management expressed confidence in their competitive positioning, highlighting their differentiated offerings and strong performance in competitive markets [66][67] Question: What is the company's strategy regarding M&A? - The company remains focused on small tuck-in acquisitions while maintaining a high bar for asset quality, with no significant changes in their M&A strategy [35][36]

Company Overview - Casey's has a total enterprise value of approximately $21 billion and operates around 2,900 convenience stores across 19 states[6] - The company processes over 800 million guest transactions annually and employs roughly 50,000 team members[6] - Approximately 2/3 of Casey's stores are located in towns with populations of 20,000 or fewer, providing a stronger market position in rural areas[8,67,68] Strategic Advantages - Casey's Rewards program boasts over 9.5 million active members, driving higher transaction values and more frequent visits[8] - The company's strategic investments in digital platforms and food offerings, coupled with a reduced reliance on tobacco sales, have resulted in higher inside gross margins[21] - Casey's private label products exceed 300 SKUs, offering better quality and lower prices than national brands, resulting in larger margins[19,43] Growth and Financial Performance - Casey's aims to deliver top quintile EBITDA growth of 8-10% through FY2026[24,27,70] - The company plans to add approximately 500 additional stores through new builds and acquisitions by FY2026[27,29] - Casey's anticipates generating approximately $1.25 billion in free cash flow through FY2026[27] Operational Efficiency - Casey's is focused on enhancing operational efficiency through store simplification, streamlined kitchen operations, and inventory optimization[53] - From FY19 to FY25, Casey's OPEX CAGR was 10.6% compared to an EBITDA CAGR of 13.4%[69] - The company's Return on Invested Capital (ROIC) improved to 11.5% in FY25, up approximately 240 bps from FY19[69]

Market Overview - Market indexes remained mostly flat, with the Dow Jones Industrial Average dropping by 178 points, or 0.37%, while the S&P 500 decreased by 6 points, or 0.09%. The Nasdaq gained 31 points, or 0.13%, and the Russell 2000 increased by 5 points, or 0.20% [1] Bond Market Insights - The 10-year bond yield rose to a three-month high of 4.186%, driven by concerns that an upcoming 25 basis-point interest rate cut may weaken the Federal Reserve's ability to control inflation, which is currently closer to 3% than the target of 2% [2] Labor Market Data - The Job Openings and Labor Market Turnover Survey (JOLTS) for October reported 7.67 million job openings, significantly higher than the expected 7.2 million, following an upward revision for September to 7.66 million [3] - The number of hires decreased by 218,000 to 5.15 million, and the Job Quits Rate fell to 1.8%, the lowest since the peak of the Covid pandemic, indicating a stagnant labor market [4] Company Earnings Reports - Casey's General Stores (CASY) reported fiscal Q2 earnings of $5.53 per share, exceeding expectations of $4.92, representing a 14% year-over-year increase. However, revenues of $4.51 billion fell slightly short of estimates, with a year-over-year growth of 3.3%. Shares declined by 2.4% in late trading after a 42% year-to-date gain [5] - Cracker Barrel (CBRL) reported a negative earnings per share of -$0.74, excluding one-time items, and -$1.10 including them. Revenues of $797.2 million missed the consensus estimate of $801.1 million and decreased from $845.1 million a year ago. The company lowered its full-year revenue guidance, leading to a 10% drop in shares during late trading [6]