Casey's General Stores, Inc. Q1 FY2026 earnings call

Darren Rebelez highlighted the strong first quarter performance, noting diluted EPS up 19%, net income up 20%, and EBITDA up 20%. Inside sales saw positive traffic growth, with prepared food and dispensed beverage leading, and grocery/general merchandise also up. Fuel team achieved positive same-store gallons and margins above $0.40 per gallon. Operational expenses increased 3% same-store excluding credit card fees, with labor hours down 1%. Casey's also highlighted the Cash for Classrooms grants, which raised over $1 million in August. Steve Bramlage discussed total revenue growth, gross profit increases, and financial metrics, including effective tax rate decrease and free cash flow of $262 million.

Total revenue for the quarter was $4.6 billion, an increase of $469 million or 11.5% from the prior year. Inside sales were $1.68 billion, up 14.2% y/y. Prepared food and dispensed beverage sales rose by $53 million to $458 million, up 13.2%, while grocery and general merchandise sales increased by $156 million to $1.23 billion, up 14.6%. Retail fuel sales were up $178 million, with same-store gallons sold up 1.7% and a fuel margin of $0.41 per gallon. Diluted EPS finished at $5.77 per share, a 19% increase from the prior year. Net income was $215 million, up 20%, and EBITDA was $414 million, up 20%. Same-store sales were up 4.3% (6.7% on a 2-year stack), with prepared food and dispensed beverage up 5.6% (10.2% 2-year stack) and grocery and general merchandise up 3.8% (5.4% 2-year stack).

Steve Bramlage mentioned that second quarter operating expense is expected to be up mid-teens. The company plans to update annual guidance on the second quarter earnings call. They repurchased approximately $31 million in shares during the first quarter, with ~$264 million remaining on the share repurchase authorization. Consistent with fiscal year 2026 outlook, they expect to continue share repurchases for the remainder of the fiscal year.

Risks include challenges in integrating recent acquisitions, uncertainties in executing the strategic plan and realizing benefits, and the impact and duration of conflicts in oil-producing regions and related governmental actions.

Q: Congrats on the strong quarter here. I guess I just want to start off with maybe understanding cheese costs. You mentioned they're slightly favorable versus the prior year. I was just maybe wondering if you could help us unpack that benefit a little bit. And if you could help us understand how much of your needs you have booked for the year?

A: Yes. So in the quarter, it was obviously really close to prior year. I mean we were a little less than 10 basis points difference on a year-over-year basis from a cheese cost perspective. As we sit here today, we are about 70%, 7-0 percent locked on our forward cheese requirements for the remainder of this fiscal year. So Q2, Q3 and Q4 are all right around 70% locked. And we only lock if we can lock at it comparable or generally slightly favorable rates on a year-over-year basis. And so we feel pretty good about the certainty of cheese costs going forward. And with the 30% of the strip that's open for us in the second quarter and the 70% we have hedged, that's why we're sitting here today, we're just a little bit ahead on a year-over-year basis.

Q: Congrats on the strong quarter. Could you go into a little more detail on price versus volume in store, please? You mentioned bakery, but how about some of the other categories?

A: Well, just overall, Chuck, we have about 1.5% in traffic increase and then about 3% coming from price overall. So that will get you to roughly your 4.5%. The majority of that price is coming through the tobacco category with cigarettes. And so has been our practice for years, as those manufacturers pass on cost increases, we pass this on to the guest, and that's what's driving the tobacco side of it. Outside of that, there's very modest price increases at all in the quarter. And a little bit on candy, just passing on cost increases but very little. And really, what we're seeing is more units purchased in the basket, which is really helping to drive the sales as well.

Q: Great quarter. I was wondering if you could just speak to the overall health of your consumer across income cohorts, any incremental evidence of trade down. And then regionally, is there anything to note in the border stores, Texas region?

A: Yes. I'll first talk about guest strength from an income cohort standpoint. For the rewards members that we have, where we can really track their behavior and have full visibility, we're really seeing relatively strong performance across all income cohorts. And the way we break that down is $50,000 or less in income, $50,000 to $100,000, and then everybody above $100,000. And so the lower income group, that $50,000 under are still shopping the stores and still buying at a fairly healthy clip, just not as much as the other income cohorts, about 160 basis points lower than the higher income cohorts, but still coming to the store, still buying. And really, where we're seeing the most strength inside of that is in our prepared foods business. I think that value proposition for the quantity and quality of the food that you're getting is really resonating with that group as well as the others. Probably on the other side, the category most pressured by lower income consumer is cigarettes. But again, our cigarette mix is lower than most of the industry. So I think we're a bit insulated from that perspective. Individually? Yes, you asked about the Texas stores. There's a little bit more pressure down there than there is with the base business. But keep in mind also, those CEFCO stores are still CEFCO stores right now. They're not Casey's stores. We've converted 3 proof-of-concept stores, but we haven't converted anything else. So they don't have the food proposition that we have in our base business. And so as we start to remodel those stores, we'll start to change the trajectory of that -- those businesses, but it's a bit -- it's under a bit more pressure than our base business at the moment.