Casey’s(CASY) - 2026 Q3 - Quarterly Report

Store Operations - As of January 31, 2026, Casey's operates 2,924 stores, with approximately 71% located in areas with populations under 20,000[55] - The acquisition of Fikes added 198 stores and expanded the fuel wholesale network, contributing to a total of 2% and 3% of total revenue from the fuel wholesale network for the three and nine months ended January 31, 2026, respectively[54][58] Financial Performance - For the third quarter of fiscal 2026, diluted earnings per share increased to $3.49, up from $2.33 in the same quarter of the previous year[60] - Total revenue for the third quarter of fiscal 2026 increased by $12,499 (0.3%) compared to the same period in fiscal 2025, with prepared food and dispensed beverage revenue rising by $25,824 (6.5%) and grocery and general merchandise revenue increasing by $53,954 (5.4%)[70] - Same-store sales for prepared food and dispensed beverage increased by 4.3%, while grocery and general merchandise saw a 4.0% increase during the quarter[66] - Fuel revenue decreased by $57,115 (2.4%) due to a 4.6% drop in average retail price per gallon, although the number of gallons sold increased by 18,673 (2.3%)[70] - Net income for the third quarter increased by $42,976 (49.3%) to $130,073, driven by higher profitability in-store and in fuel[77] - Total revenue for the first nine months of fiscal 2026 increased by $1,041,181 (8.7%) compared to the same period in fiscal 2025, primarily driven by $1,034,139 from the Fikes acquisition[78] - Prepared food and dispensed beverage revenue rose by $129,101 (10.6%) due to a 4.8% increase in same-store sales and approximately 5.8% from store growth[78] - Grocery and general merchandise revenue increased by $351,302 (11.3%) with same-store sales up 3.4% and store growth contributing approximately 7.9%[78] - Retail fuel revenue grew by $393,559 (5.4%) as gallons sold increased by 288,655 (12.1%), despite a 6.0% decrease in average retail price per gallon[78] - Other revenue surged by $167,219 (62.2%) driven by increased wholesale fuel revenue from the Fikes acquisition[79] - Net income increased by $103,551 (23.1%) to $551,764, attributed to higher profitability in stores and fuel, offset by increased operating expenses[85] Operating Expenses - Operating expenses rose by $27,440 (4.1%) to $697,640, influenced by the operation of 31 more stores and increased labor rates[74] - Operating expenses rose by $218,050 (11.5%), with approximately 6% of the increase due to operating more stores[82] Cash Flow and Debt - Net cash provided by operating activities was $979,030 for the nine months ended January 31, 2026, an increase of $222,034 from the prior year[93] - Net cash used in investing activities decreased by $1,009,596, with expenditures of $552,730 for property and equipment compared to $1,537,066 in the prior year[94] - As of January 31, 2026, the Company had total long-term debt of $2,331,744,000 after accounting for current maturities and debt issuance costs[96] - The Company has a variable rate incremental term loan facility of $807,500,000, which requires quarterly installments ending October 30, 2029[96] - The Company has issued various senior notes with interest rates ranging from 2.85% to 5.43%, with the highest single note being $325,000,000 due in 2032[96] - The Company has funded acquisitions and capital expenditures primarily through debt issuance, existing cash, and operational cash flow[96] Risk Factors - The Company cautions that its financial condition may be affected by various risk factors, including increases in food ingredient costs and disruptions in the distribution network[98] - The Company emphasizes the importance of compliance with governmental regulations, particularly regarding tobacco and nicotine products, which could materially affect revenues[99] - The Company acknowledges that general economic conditions and consumer preferences may impact its financial results and operational performance[100] Tax and Revenue Metrics - The effective tax rate increased to 24.1% in the third quarter of fiscal 2026, up from 19.2% in the same period of fiscal 2025[76] - Revenue less cost of goods sold (exclusive of depreciation and amortization) was 25.7% of total revenue for the third quarter of fiscal 2026, compared to 23.4% in the prior year[72] - Revenue less cost of goods sold (exclusive of depreciation and amortization) was 24.9% of revenue for the first nine months of fiscal 2026, up from 23.7% in the prior year[80] Interest Rate Impact - An immediate 100-basis-point move in interest rates would have an approximate annualized impact of $9,500,000 on interest expense[104] Fuel Price Management - The Company utilizes futures contracts to hedge against fuel price volatility, ensuring that all hedges are matched against recorded physical transactions[105] Future Capital Needs - Future capital needs for operations and store growth are expected to be met from cash generated by operations and additional long-term debt, without adversely affecting liquidity[96]