Casey’s(US:CASY)2025-03-12 15:51Financial Data and Key Metrics Changes - Diluted EPS was $2.33 per share and net income was $87 million, both flat compared to the prior year [10] - EBITDA increased to $242 million, up 11% from the prior year [27] - Total revenue for the quarter was $3.9 billion, an increase of $574 million or 17.3% from the prior year [17] - Gross profit was $913 million, an increase of $126 million or 16% from the prior year [20] Business Line Data and Key Metrics Changes - Inside same-store sales increased by 3.7% for the quarter, or 8% on a two-year stack basis [12] - Prepared food and dispensed beverage sales rose by $48 million to $397 million, an increase of 13.7% [19] - Grocery and general merchandise sales increased by $138 million to $1 billion, an increase of 15.9% [19] - Same-store prepared food and dispensed beverage sales were up 4.7% or 12.6% on a two-year stack basis [12] Market Data and Key Metrics Changes - Fuel gallons sold were up over 20% [10] - Same-store gallons sold increased by 1.8% with a fuel margin of $0.364 per gallon [14] - The Mid-Continent region saw a decline of approximately 4% in fuel gallons sold, indicating market share growth [15] Company Strategy and Development Direction - The company is focused on accelerating the food business, with strong performance in prepared food innovation [36] - The integration of the Fikes transaction is a key strategic initiative, with expectations of achieving $45 million in synergies over three to four years [64] - The company aims to enhance operational efficiency, achieving reduced same-store labor hours for 11 consecutive quarters [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a potentially volatile environment due to enhanced capabilities and a resilient business model [49][50] - The company expects to achieve its target leverage ratio of approximately 2 times by the end of the fiscal year [28] - Management anticipates EBITDA growth of approximately 11% for the fiscal year [29] Other Important Information - Operating expenses increased by 17.8% or $101.3 million in the quarter, with 14% attributed to unit growth [24] - The effective tax rate for the quarter was 19.2%, down from 24.1% in the prior year [26] - The company maintained its quarterly dividend at $0.50 per share [29] Q&A Session Summary Question: How has Casey's adapted to a volatile environment? - Management highlighted improvements in procurement, data analytics, and guest insights, enhancing confidence in navigating uncertainties [47][48] Question: What are the timelines for improving margins at Fikes? - Management indicated that improvements in prepared food margins will take time, with kitchens being added to stores to enhance product offerings [53][56] Question: How is the integration of Fikes performing? - Early performance is satisfactory, with high-quality stores in attractive geographies, but the first quarter was impacted by winter weather [62] Question: What is the outlook for consumer spending? - Management noted some pressure on lower-income consumers but emphasized that the majority of their customer base remains stable [85] Question: How is the company positioned in a recessionary environment? - Management stated that Casey's has historically performed well during recessions due to its focus on basic daily needs and competitive pricing [75][76] Question: What is the status of the wings business rollout? - The wings business is still in early testing stages, with positive results so far, but no final decision has been made for broader rollout [122] Question: How much EBITDA did Fikes contribute this quarter? - Fikes was EBITDA dilutive this quarter due to integration costs, but it is expected to be modestly positive in the next quarter [113]