Casey’s(CASY) - 2026 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Diluted EPS reached $5.77 per share, a 19% increase from the prior year [6] - Net income was $215 million, and EBITDA was $414 million, both reflecting a 20% increase from the prior year [6] - Total revenue for the quarter was $4.6 billion, an increase of $469 million, or 11.5% from the prior year [11] - Gross profit was $1.11 billion, up 16.5% from the prior year [12] - Operating expenses increased by 14.6%, or $88.7 million, primarily due to unit growth and higher insurance and property taxes [14] Business Line Data and Key Metrics Changes - Same-store sales increased by 4.3% for the first quarter, with an average margin of 41.9% [7] - Prepared food and dispensed beverage sales rose by 5.6%, with an average margin of 58% [8] - Grocery and general merchandise sales increased by 3.8%, with an average margin of 35.9%, up 50 basis points from the prior year [9] - Fuel same-store gallons sold were up 1.7%, with a fuel margin of $0.41 per gallon [9] Market Data and Key Metrics Changes - The Mid-Continent region saw an approximate 3% decline in fuel gallons sold, indicating market share growth for the company [9] - The average retail price of fuel was $3.00 per gallon, down from $3.31 a year ago [12] Company Strategy and Development Direction - The company is in the last year of its three-year strategic plan, focusing on executing high-level operations and growth [6] - The integration of recent acquisitions, including the Fikes Wholesale transaction, is a key focus area [2][3] - The company aims to maintain a competitive edge through its prepared food offerings and grocery items, positioning itself as a one-stop shop for customers [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue executing its strategic plan and growing the business [6] - The company anticipates that the second quarter operating expenses will be up mid-teens, consistent with previous communications [18] - Management noted that guest insights from Casey's Rewards members indicate strong performance across all income cohorts [37] Other Important Information - The company has total available liquidity of $1.4 billion and a debt-to-EBITDA ratio of 1.8 times [16] - The board voted to maintain the quarterly dividend at $0.57 per share [17] - The company repurchased approximately $31 million in shares during the first quarter [17] Q&A Session Summary Question: Can you unpack the benefit from lower cheese costs and how much of your needs you have booked for the year? - Management indicated that cheese costs were slightly favorable compared to the prior year, with about 70% of forward cheese requirements locked for the remainder of the fiscal year [26][27] Question: Can you provide an update on the Fuel 3.0 initiative? - Management reported that approximately 8.8% of total fuel is now procured through Fuel 3.0, with about 3% from the base business [29] Question: Can you discuss the overall health of your consumer across income cohorts? - Management noted strong performance across all income cohorts, with lower income groups still shopping at healthy levels [37] Question: What are the learnings from the SEFCO integration? - Management stated that the SEFCO integration is on track, with expectations for synergies primarily coming from remodeling stores and enhancing prepared food offerings [71][72] Question: How should we think about store growth in the outer years? - Management indicated that the company aims for 4 to 5% unit growth per year, with opportunities for expansion in existing and adjacent markets [76][77]