Casey's General Stores (CASY) 11 Sep 182019 Q1 Earnings call transcript

Company Profile

Participants

William Walljasper	SVP and CFO
Terry Handley	President and CEO
Daniel Imbro	Stephens Inc.
Bonnie Herzog	Wells Fargo
Kelly Bania	BMO Capital Market
Chuck Cerankosky	Northcoast Research
Christopher Mandeville	Jefferies
Ryan Domyancic	William Blair
Damian Witkowski	Gabelli and Company
Benjamin Brownlow	Raymond James
Ryan Gilligan	Barclays
Paul Trussell	Deutsche Bank
Anthony Lebiedzinski	Sidoti and Company

Call transcript

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Operator

Good day ladies and gentlemen and welcome to the Q1 Fiscal Year 2019 Casey's General Stores' Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the conference over to Bill Walljasper, CFO. begin. may you Sir,

William Walljasper

Officer, thank quarter joining Bill ended Terry Chief Financial and Casey's Walljasper, to results Officer. Executive and President for July Handley, also you morning, here. us for discuss Chief is Good XXst. I'm

you and with as the creation statements, and which whether a with reflect other XX-K otherwise. the result value provide to begin, possible and during forward-looking our quarterly forward-looking made constitute stores. Casey's first or by of a plan factors of certain we assumed Reform This These factors annual our of forward-looking or with take XX-Q will events, uncertainties, disclaims the within related any known the to update that as implied that as on and statements, include meaning Terry today including report by in this on Before our call any then to to on any growth to available few and first and respect Any strategies, performance revise Private that call other our are Act from Securities intention future XXXX. during value Litigation investor described or website. cause statements new creation forward-looking results future from of statements and quarter well statements results those remind summarize on progress I'll as plan an actual business or or events forward-looking uncertainties at morning, may creation a our information, obligation statements Form results statements most ability us plan. the of minutes as of on and value the to may future or differ of to our operations, our There update SEC opportunities, expressed unknown risks, Form the execute benefits our results this number are reports realize materially recent filed risks, future improvements made current views

We will to those Terry open would I now the about discuss questions results. results. for then like call turn to over to those

Terry Handley

Thank everyone. you, Bill good morning, and

memory lost will that take years loved Before I a our ago always XX/XX. in and as day. I XX like those of of out the on families lives would a Thank and to remember, moment history This our day to those those the of we that result begin, lost thoughts go attacks in ones you. was

the XX% margin share in release, worked quarter hours were for compared As The stores, by were results stores, from quarter tax more driven of last per a reform first the stronger to year, year fuel first most reduction seen of you diluted earnings the benefits ago. of primarily the XXX and press of up have repurchases. inside to operating $X.XX $X.XX share

with X.X% quarter a gross per us to fuel and were We year total this to nearly from in focus fuel margin each for acquisitions, gallons was of in to of contribution and margin new pricing XXX fuel categories. nearly out category. Same-store a launch close gallons total August from and and category, $XXX.X proactive product would the for formal Same-store In primarily stores, guidance due XX% to up over we gallon. our schedule period in other X% in of XX.X% the sales taken on build for increase quarter, continue I X.X% up first be quarter creation fuel and we those annual average the to in of average been were The average gallon profit merchandise the to strong in our primarily with the of store to period. coordination X.X% Same-store shift annual in the retail approach beverages fuel, retail strategy. recent were a a an enabled dollars slightly expectations grocery with annual guidance This to XX.X% well above due increased $X.XX initiative. more higher higher team during price XX drove preparation a team ago, million, points during details with up have basis replacements. execution value some fuel been the of the team price and go optimization the sold items. our results In interim, to able exceeded achieve In during continue category. compared the with cigarettes like early progress mix our are a up in now achieve to below to gallons as encouraged the The the $X.XXX the within our has to margin plan nearly to the to and are the the fuel a up fuel the our sales quarter. average quarter our range. operations was packaged category million performed margin up fuel our our fuel

monthly in nearly of last August against As prepared a and sales gross margin to XX%, XX thus celebration. up basis quarter was almost year. high-end we XX% Same-store In increased though at of dollars strongest same-store we million. our Same-store of guidance. are quarter, the promotional during annual as down food last fountain nearly category, X.X% in were quarter, sales the million the the profit quarter. XXth to quarter below from prepared Even total the sales promotions the margin for the margin points are were million. around food was The a X.X%. the quarter $XXX.X Same-store compared guidance favorable In first down our up the Anniversary $XXX for far increased our the in the the trending average the sales first the additional at X.X% sales year, year last and gross to category guidance. $XXX.X rose our comparison sales were trending in including profit mix activity dollars to our maintained annual result to annual cycle fiscal product due quarter for high-end up primarily

For $XXX.X XX.X% the total to increased quarter, million. operating expenses

were an the operating in paid healthcare million quarter due due in primarily credit $X following increase and fees $X.X expenses increase million, first impacted card severity in a a items: fuel of by XX% The primarily claims increase fleet and to increase cost, of claims. expense fuel price; to

of same due these fees two excluding impact this year XXX Same-store primarily more up X.X%, operating approximately operating expenses a card the up to Excluding X.X%. ago. quarter stores expenses items, were credit to the period were compared

worked, help XX over continue some reductions, macro We and to to operating as Bill the effects statements. with the to make discuss offset work adjustments turn and our such delivery like calculators. call pizza the expenses, hour of financial I to budgeted now to on would hours

William Walljasper

Thanks, Terry.

for a replacement the stores. ago our statement the to prices, due income primarily number two of from Federal decrease rate an in -- depreciation the stores reform below accelerated tax due year this total XX.X%, up effective Activity a billion, retail and the was primarily state Depreciation increase which due quarter. a down tax to rising was in change in Tax to rates. operation from and On quarter quarter in the guidance, revenue the fuel was to XX.X% our was XX.X%, quarter in up $X.X annual of in

be We continue fiscal our for to and expect tax XX%. we to -- between to effective rate continue XX% XXXX

Long-term $XX.X At and Our strong. million. were balance cash $X.X equivalents was maturities cash sheet XX, continues debt billion. July to of current be net

Our debt-to-EBITDA ratio times. is X.X now at

generated we million year-ago operations, compared same in $XXX.X quarter, million expenditures at the period. flow from $XX.X a with capital the For to cash million $XX.X in

higher subsequent continues, the quarters and replacement as to expect to the complete fiscal projects -- year. be budgeted We we new construction in capital be for our expenditures at store

fiscal turn call our XXXX. $XXX Our you back would Terry on with over growth capital progress unit I estimate expenditure creation and like now is the update value to the plan. million to to our for

Terry Handley

Bill. you, Thank

and fiscal XX additional target is to stores. year build at least Our this XX stores, acquire

have acquired opened This store, one XX purchase. and additional quarter stores new constructions, agreement under we XX to store

a past team due store the You sites store distribution we XXX have new of year, should our to expect fiscal the Currently, for development of new construction. years. even this agreement store over two under openings relatively efforts

to I would We growth. achieve for target growth discuss now track our unit believe are on very value like future well and creation to our we positioned are plan.

plan. As quarter execution intend update we indicated we to on progress earnings towards call, provide on previous an our that regarding with you our each

comprised reminder, and As card as fleet plan drives as on well long-term programs reallocation. programs, value engagement and program, and our price is a controlling of several optimization focus capital digital expenses including a continued new a multi-year operating key

deliver card program track a and This fleet which right these our aggressive confident completed a last customer with course schedule program. on growth milestones drive several of begin our represents initiatives this to increased We for the will outlined call. address is we profitability, key approach our better had with category shareholders. important last key I quarter. are returns and in to would like over accelerated the We more

fleet we reported to FLEETCOR, selected This a program October. this launching we card As past and they as with previously, work manager new together FLEETCOR, be our will in we on-boarded quarter new vendor.

driven traffic. fiscal and program in We resulting increased expect volume an fuel from this incremental to see in XXXX, of in QX sales benefits lift in-store by

executing fleet on to fuel addition card In we our product busy optimization have been the plan. program,

to a additional fuel have fuel other centralized all our and By as price fuel Since other During premium impact us additional for the update platform which XX our and network the like a our of and throughout food higher stores data, for generated merchandise the Dunnhumby category have an with fuel of by allow advantage diesel. converted margin going diesel we to pump The call, would to in in add we will to sales overall XXX grocery forward. margin prepared carry premium data these I the We we stores stores will to platform optimization. improve and every you optimization of optimization, make one products [ph] market initiative Price sales significantly the pricing quarter, store, and biodiesel, fountain these broad Biodiesel, network. positive on, believe regular our rules and based next XXX end or at categories. decisions combined to our margin last selected and than as locations. will price will products. and to is QX, our leverage

a will fuel optimization this select begin planned fiscal this locations fuel with rollout of in wide year. network We later month piloting optimization

inside process and marketing the quarter we both This first We program increased price of for begin our QX over stores with also our course by categories. later items testing a planned will expand our supported year. promotion XXXX, select optimization fiscal remaining rollout in-store a shift the program into the In fundamental an our to to visibility begin pricing of of all fiscal fuel will QX and and represents strategy. in this purchases

this are initiative We bring and the about believe benefit company. excited the it we to will

key progress services layer our Since to SAP quarter. last our Salesforce and have with for solution, the and last continue for following marketing customer selected call, We digital reached mobile milestones and database YieldSoft Hybris the [ph] over platforms. the engagement ordering e-commerce have our integration program and tool. several we for

and an experience we and engaged This product a and have seamless offers marketing partner. in-store implementation promotions engagement and us seamless digital that by visits. website, deep categories that app, in-store of additional involve to program, customer a enhanced providing platform program, rewards. online customer our the This also facilitates to convenience gain and Deloitte loyalty drive of e-commerce create will allow redesigned serve understanding intend digital personalized the Upon Digital target will We mobile a as customers new infrastructure. digital enhanced better technology, value them our and integration both effective they enterprise a

e-commerce with We sales value app platform, the a of loyalty our volume fourth mobile to are rollout targeting new the identify fiscal of by currently creation the the system XXXX. review optimization starting and to in our and our the a opportunities, next process are program new generated increased pilot a in broader completed quarter, with efficiency. a for anticipation is store and long-term In This focus growth, evaluating on cost plan be XX we in days. expected distribution in

increasing allocation, Another through element shareholder to value approach creation of a is value disciplined repurchases. share and and our capital dividends plan

as and the will allocation construction attractive return through landscape our with continue prioritize Our strategic opportunities. discipline creation while retail strategy investments continues including new as capital acquisition well rapidly profiles, value prove growth evolving to to In store programs, challenging. closing, store

store enhance performance transformational growth. profitable to long-term We and steps have deliver taken

the has significant execute and successfully drive shareholder correct next long-term Casey’s team Moving the place to forward, we right believe value. strategy in and chapter the on

take now will your We questions.

Operator

you. question from Stephens Ben Bienvenu comes from [Operator Instructions] first Thank Our Incorporated.

open. is line Your

Daniel Imbro

Yes. Ben. guys. for questions. This on our Imbro Thanks, for is Thanks Daniel taking

Terry Handley

Daniel. bet You

Daniel Imbro

you’re a you guys bit wanted on than margins but start in lighter gallon were growth of end I fuel higher guidance range. the thinking Can more beneficial are that early the little that think at to taking how talk off? function about that Was the you quarter, a a I some little the the guys bit price optimization mentioned. about you of mix margin trade or was shift, of

Terry Handley

work both. Nathaniel the Vice as you, opportunity those the Daniel, forthcoming -- grow tool, where on price Fuels advantage Fuel fuel our we with Doddridge, price that support But opportunity is tell saw also markets would with that margin of primarily grow his optimization I could of Director where and knowing a President the our of that’s some combination an identify side. he Retail and is with we to the of we markets Grimes, well could as an Debbie Procurement gallons, strategy doing the team,

are gross with do dollar managed of we all we categories approach, profit to really and expectations. looking a So long-term as for balanced our

a will regarding we're terms have going gallons find we terms in in where be strategic to growing trying at markets other can know more that we and different strategy of margin. we markets So to versus we maximize where balance, of look

in it's terms and operations us strategy. see for So, we'll right balance and within a a that store continued now, certainly opportunity of to venue work the team, new

Daniel Imbro

the that And to quick back at anticipate way the we that up that comps, this a the level, later kicking this of right a the in year, of Fleetcor growth maybe in half and that kicks to gallon is being Great. on think in cadence? looking -- until guidance, anticipate follow year, boost about in benefit should a kind

William Walljasper

Yes.

of So always we think we that is optimize now, fuel an Fleetcor that. comes have, we good and online. anticipate to looking the QX we're this and think certainly gross to QX Certainly out -- program, Bill. uplift right into I movement and like gallon as in from a about Fleetcor expect way dollars Certainly profit the a program rolling bump that's certainly

Daniel Imbro

in Okay, that's for quarter. great. more operating Can the little about Thanks you up talk bit color. a the They're XX% expenses.

out from X.X% and up could of but think there and some credit more beneficial buckets you in maybe I a detail excluding like back in or healthcare, the bit stores the little XX card what hours. delivery said between was the on fees guys to prior impact the contributed you initiatives pairing parse quarter new initiatives, prior any

William Walljasper

I'll new on you XX.X% it’s to the and increased new contribution little you was take from lift. Roughly, stores give X.X% Yes, credit had X% but breakdown. not and about just Daniel our we step color and down cards further, acquisitions a from comes When replacement the certainly, of Yes, expense. fuel that newer coming take maybe stores roughly increase almost bit stores, more the that. only a

we called did the we more unusual quarter. in bit a insurance, As health little have out activity

the that's or creation a totality actual paid Our XX% drove down value of and is up up X.X% a stores had we high higher almost little That XX.X%, contribution the other were certainly X% in that things in positive the the that at certainly, new up and going also course roughly at that, impact plan, contributed from a we that dollar seeing EBITDA the number in continue stores X% side the direction. claims saw of quarter, clip believe were year, about But least quickly over gets quarter, years. much that the on, claims and to you thereabout. ramping we -- early now the about new are stores of that about be trending to one we're putting in we're quarter. roughly right XX% ultimately are that they the half of prior Obviously, the that in up that previous we new on the the in than to over

We year. locations making team encouraged we're efforts So, to store the here and far credit a this we're that. by development the fiscal and that's our so think

Daniel Imbro

Okay, follow-up. quarter I for Last bit date. a Thanks, more just color appreciate great. Bill. one to of little a me, the on Terry,

each called gave out do for August You of segment? easier the compares kind how toughest monthly But the you remainder get was monthly comp comps the I look of in think quarter the prepared the board? foods. across the for Do

Terry Handley

than fiscal easier certainly the I half month Yes, that are August. back experiencing we those be throughout Daniel should year, would the of the what you comps monthly of in tell

last a just tremendous recall was weather. you ideal August month If of

had the big certainly and eclipse, solar short-term Midwest, sales in bump that a also We a here the was impact. really from

to we the look and September/October, much much into as of the see more as favorable, back and than some half have be favorable certainly, comparisons so again positive here So will August, QX we we year. the what in more QX, opportunities you get in

Daniel Imbro

Thanks guys great. luck. of That's and best

Terry Handley

Thank you.

Operator

question next of from comes Wells Fargo. Bonnie Our Herzog

is open. line Your

Bonnie Herzog

Hi. morning everyone. Thank good you

Terry Handley

Bonnie. Hey,

William Walljasper

Good morning.

Bonnie Herzog

a I you on creation was a give Hi. if question high the an had I update guys your level. hoping I on value timing guess, could us on plan.

plan You that expedite to mentioned your in release it. you

FYXXXX hit might initiatives? of how give able sense you'll I'm you maybe these to think I your to to ability earlier? of guess soon how some a a we about us implementing much guidance, get your And could timeline. So shorten the should be trying these have targets finish of you sense then

William Walljasper

we’re creation we certainly right year, of execution to fiscal out starting we’re believe right to fleet and plan in that do the on is we QX indicated I’ll program, of optimization, track optimization you’ll the so, glide optimization on obviously, start that. optimization, when programs these from into be coming this look rollout we’re of pace that The March the track With respect at benefits with start of part right card the QX but with should the off price or -- And we’re digital this path original I here on will that of continuing of I later on Bonnie pace right accelerate, with gates, to from when commentary. price the the the and former with that’s looking say Bill, to some we’re that. the think the price have, Yes, transformation, execution we that timeline back and I start and then for again price seeing we of benefits in seeing that value we’re at QX. announcement respect our just original to different

I to that so actually with as coming the fiscal very these to well think year. QX we we’re time a head and have next to all And things forward to setting at of up respect look kick-off

you’ll Bonnie, we that perspective, can executing so quantitative we as really start a hit Street and the planned we hearing that more plan. Right are some to talk and head communicate into milestones us qualitative of sure making from So, those we the aspects QX. quantitative on it’s this about now execute

Bonnie Herzog

your will back there implement helpful. investments to of a to of for just of buying terms in could be in in want us of if decision anything sense plan, these that’s get light investments update stop to initiative? you stock. on what And this required I the Okay, value your regarding terms lot really topic, your creation has follow-on quick a just guys especially a to required changed

William Walljasper

articulated to was no CapEx quarter these standup Yes, about the to in million what investing including to million that investment material anticipate program. million to of been $XX the $XXX digital there $XX we programs. budget we roughly standup Last has change

standup. little investment very The and OpEx to other very programs have little two

through investments And so going the additional come really transformation. the to is

I year CapEx in However, fiscal a say neighborhood. expect would I next not would that see that to increase

into little next the that. I an think move quarter And part that’s course later we’ll year of when bit see update the of as you OpEx start of into the forward every you’ll and a on to fiscal this fiscal increase. we year, more

Bonnie Herzog

on might the since during on a quarter, you had have strategy, And tweaked question promo bit margins. had like that you then I a which pizza your effect mentioned you Okay. minimal seems your

then business? have and opportunities So to just about and to this strategy made for any more hear you changes refine promo might possibly your pricing curious

William Walljasper

Terry, that take one.

Terry Handley

strategy, as still would I Yes, in us we obvious know remain to competitive in remains need terms that the certainly and market a it we to it’s game. you tell that promotion very you be of very pizza that

promotions promotions of see other increased on to along you that continue if maybe our promotions prices, higher additional occasionally topping maybe will and single the forward see or supreme you to some will. even be would So value pizzas you line

our be bigger in combos. get continue going day the and is an the thing some casual only think we’re topping day and pricing with we noon breakfast we can in strategy where our single to to environment to opportunity I brands, as the part fast taking and understand regain that our pizza hard pizza here also to the pizza but QSRs the certainly competitive leverage is even So, morning to But promotions that’s some part, with And major share. sandwiches in major with competition. today, market work of very not forward

to strategy a drive continue service promotional marketing have those to that are we’ll with refine that again to speak. the work sales area to And to very as continue going upward. be activity doing and continues and and we’re regards we So know teams to the to competitive hard very food I

Bonnie Herzog

you. thank right, All

Operator

Bania comes Kelly question Capital next BMO from Market. Our of

Your line open. is

Kelly Bania

Hi. my questions. thanks morning, Good for taking

William Walljasper

Hi, Kelly.

Kelly Bania

wondering Hi. the I could bit on you distribution little review. a system if was elaborate

test to the on well? mentioned, help that if the what focused to it. that an or maybe separate, maybe on just us in of expect out process frequent that's deliveries And more just You understand on that's get related what is as you I think update

Terry Handley

for stores. number anticipated we combination this Bania, things. tell we our Certainly have might you of sure enterprise construction would I is ensure we after grow to that be support would with to And those the also wanted to as Haute right a what several we we the number as to center but was Terre three. sure facility, units, have Yes, near-term that in Terry. that can the of distribution and -- continue the looking play. that we And opening be the of make

we to a product cost And mixes that the know internally fresh the so that we most do be very products, we in have also the And that? significant need effective provide come week. here actually be number Directors than may so in be high an combination once opportunities complete alternative can volume them to hard back third-party three, more QX, undergone during and to distribution where study very Board working and a so of our three. What we that in at with also looked with or are what be. to also and in we value whether stores as steps of sales creation terms number increase only those we DC the number initiatives, recommendation next DC would opportunities in DC consider from of anticipated But not different plan conjunction stores the to three we also see a opportunity

and a we'll of our like. set will that terms meeting. we'll Board path here distribution what look QX forward of during come so will study QX And to report Directors at the I said, conclusion network the And that to in as

Kelly Bania

to forward look that. Okay,

new just about lot feel seems you’re vendors a different a it the all Dunnhumby. just from -- of Deloitte do on just you of change and just question teams to communicating I was with, the to lot listing out them How working vendors. outside with like Salesforce Another

you the once? and how feel with going all things these curious communication Just execution at on about different

William Walljasper

so is Kelly. Yes, Bill, this

So, a part the and that’s Officer. Neilsoft Salesforce Obviously when we vendors why Terry SAP, at we Marketing reason hired and the look of the Deloitte. mentioned Chief that

process the as just in to of right also well. of looking now We Digital. Vice President a a We’re Director hire on-boarded Digital

set certainly their starting currently, try leverage this so execute the on these on to these vendors stay some we that why we team, the interim have these to of skill programs. And perhaps out during to is build don’t going set to out skill to we’re understand to that we’re but

obviously So customers digital of we see our think tremendous saver fuel there’s the piece with in has program past. in that, a on the We small certainly our value how transformation. resonate just

And of to so areas in we think, business. of that our we leverage other can type execute

the skills people we’re the and to these so have on-board expertise And activities. definitely bringing coordinate

Kelly Bania

come about what then you’re with that’s perfect. the given of maybe just things year, are us And quantify, card, kind more tracking, up thinking and in kind the Can but you’re you guidance that how giving assuming to talked you your lift terms of maybe that lift about gallons. expecting in how of where that understand the fleet specifically? Okay, you for help a

William Walljasper

Yes, on our in the in as fleet card program, FLEETCOR. our vendor this or partner -- is Terry mentioned process this

see the of experience movement. Director went our on-board has information two The similar when experience coming as Fuels at also card we new the fleet up is who lift new they the experience actually and well. in So Also those in program stood for RFP that this area that when out combination of their looking lift us gallon as far and executed. as programs back did typically to an we a and secure partnership, certainly heard from the vendors several gives

in obviously come We members fleet also card the and know shopping that do these store. also new inside

what that’s the to So the that lift comment well. we may believe as have a store Terry inside will

like fleet with one partners the of not And seen we program things of the the have ours. the about Midwest. stores These stores in is get of our the that density excited card really density so

that that on excitement to are there so program. an around certainly execute And

more of the here we'll of So December in kind see report call kind how tracking. we're

Kelly Bania

prepared category. Okay, food one another very then just helpful. on And

there. the environment about competitive You commented

I think July. took price you some increases in

noise just how near-term there prior you to and you're comparisons. curious forward? sounds implement how unit about in price maybe some some when movement increases But your you price that is Just and impacts like about curious feeling just it category relative the with generally the going increases feel experience weather

William Walljasper

on Yes, we And was so in predominantly hot we increases our slices donuts. on in did one of July and take of May was price took then some piece sandwiches. a couple that another

And so we elasticity speak we is as with not have currently seen any -- there that. of as here,

issue more that in of generally overriding is I we that is affects and think have customer us count. a industry an the

Specifically farm down with continued income that of area income. obviously put being our discretionary the in pressure does on kind

And of need we to will forward with be going increases, cognizant something of. that be opportunities. basis so kind where we that’s on see a case-by-case to And have price

mentioned calls, pricing basis we've our very a products. do competitive we service As in key on on prior regular

instance or opportunity donuts to that to believe of that so take take And we advantage piece we take have an might some of those. -- slice, increases like those the price for we'll extent, strategic

So…

Kelly Bania

Okay, you. thank

William Walljasper

You're welcome.

Operator

question of Cerankosky from comes next Northcoast Our Research. Chuck

open. is line Your

Chuck Cerankosky

Good morning Great quarter. everyone.

William Walljasper

Thank you, Chuck.

Chuck Cerankosky

if too looks numbers like -- talk quite Looks Anything working on getting a capital this better past. quarter. at I your want deep, pretty about? bit in I managed it than Bill like it well without the was there glanced into to going and you

William Walljasper

category. fuel is turn and Well, the is of couple that quite that probably much One perhaps side often a products there of things called we've and as don't some I of on little those I'll to the probably on conscious fill out. understanding what effort products a max premiums. those our do maybe some taken diesel more tanks on called we some a in and some having rate of fuel of the job secondary on a inventory management bit with And respect of

stamping, in as the It of category, probably this pre in those we in difference helping a which improved tax other our relocate of well that The cut post-tax cigarette past is a as also in category change here quarter. here to and we've in the some made able we’re business. elsewhere people operating has stamping expenses the inventory about have is recently thing XX% the cigarette down

two things the at this that call out be point. I will those So would

Chuck Cerankosky

And in-store. with team, more a fuel about management team you then the on bit working you that marketing talked also please? Can expand

William Walljasper

take Yes, Terry will that one.

Terry Handley

Chuck, retail team. this our I you by past was it strategy is a we've to leadership the talked that Terry. in historically regards about with pricing tell decentralized and very store this strategy managed would and our operations

very opus to if it was available a what looking and tuned, sure more pricing had Doddridge follow of Nathaniel They more higher dynamic While at undersold. doing. with are in of data that's what centralized will optimization them. weren't the we a the terms They they for if competition, makes so regards have will. Today, we’ve information with certainly working We closely made operations they his will certainly very data combination and is forth a diversified market-to-market it on-board, And you that are expertise was them. of if that we're opportunity we available store points, more you markets level how It the you leadership. price. in to team have with

very to regarding they whether so team that that store of with be we gallons. a -- the particular grow attack are how closely to make decisions our some leadership and operations And regarding market working recommendations might

get where gallon proactive see we if more so strategy. the our a certain as we're become we to to margin. where oppose in opportunity of pricing markets probably of retail that to reactive, Because little to see for And an looking going at we're with may particular opportunity gallons, to we terms time. grow period But regards maximize also opportunities

we were we’re what as so trying for to of we an and kind dollars. that’s gross do to balance opportunity And balance really strike maximize see that profit

Chuck Cerankosky

much. very you Thank

Operator

Our Christopher next Jefferies. comes of Mandeville, question from

Your line open. is

Christopher Mandeville

in I think comp you think beverages, throughout you could strength you we and positive categories. just May speak particular, Bill, comments quarter fuel all to morning. about for the remain did the when referenced two packaged And quarter-to-date food your in those items then recent can for prep territory? cadence how the Good actually the

William Walljasper

when one, your month previous weather the the kind month we to we in was a actually that May I’ll all last lines. that -- June relative solid far across then very as with about categories, call the might as across way and regard. July were that cadence as And will look certainly the of made permeated mentioned roughly what weakest may have Yes, first would same -- carried in you month for us the have take all and at and obviously be

us. for month strong very a was May definitely So

August well head gallon of fiscal the as far and just month this prepared as as was one by second previously, the the last into question any strongest away the year a of month in year, strongest was so was was month asked that by food comparison quarter grocery. fuel of And we way but that

little stack, acceleration I or maybe Hope And so relative year two four had. stack last we’ve comparison bit to a what stack year helpful. against a that’s now the five be an And a made that’s acceleration on seeing at the this are in we August from so will basis, point from first the that comparing month of the will year currently, a roughly on months two put Chris quarter. there issue we’re we out commentary two

Christopher Mandeville

profit profit mix or the very actually on is anything of what a points, XX That’s and some even gross and price really sustainable, shift, over optimization maybe the expansion that either But dollar And that when the or in to the thank have grocery move was on comp we think was helpful, performance, really two byproduct gross the is else, quarters? results margin basis you. seen about into sales -- of best dollar coming generation. growth we that the just extent as the then that over last we the years or

William Walljasper

see in respect was lift direction the did May the obviously with Yes, touched the interesting depending in month significant And his pricing. margin and quarter commentary, lift specifically a a some for uptick into we will year, very to we’ll see packaged on what had be in dynamic, obviously. volume in because the we beverages later relative something strong several see in optimization in want quarter, items we Terry go instance like With will more the we to margin other with so well. to forward of our we weather, particular that margin on as very on go of in we’re probably that’s the category, move report we has we rollout location, part that the stores, continue liquor will a than as fiscal doing which some price a to doing cases sales couple that higher the things

other the OTP, of on to very continues products done grow it the tobacco manufacturing side the have other that The side. well continue product for innovation as and us

a helping. few were what’s of those of So kind as kind takeaways to just

be margin this sell margin course generally lower items a fiscal just instance Now will of because and speaking I and packaged i.e., many year, month QX our will Chris, some as the like of say beverages. normal we QX a of higher don’t the for historically

Christopher Mandeville

Right, of to per okay. the suppose, relates then if I store? to we terminology, labor when in as inning the kind And average in what I baseball we utilize think are about it reduction today were OpEx,

William Walljasper

I those. middle say hours of we would additional continue some or game, be to to realign one of we I in right Terry focused the mean, that we’re tweak a this, continue Well, alluded to on things budgeted and

we continue more We rather there than here hour opportunities to at and to there are. tremendous had be some And has that carbon specific efficient, stores to see currently benefit.

anomalies have in into obviously that quarter, of against We retail the will the first prices had was just start higher the fuel fuel the one was some mention we end towards of kind will retail play. I year. coming cycling price that higher

see did not to of long-term into on QX, and chance a the has acceleration in incentive incentive plan, that we Also have long-term plan that in will acceleration of So QX we some a QX, QX. mitigate. the comparison expense an

claims. creating healthcare noise paid about the and high little then another with just a a last that’s costs thing in so And one bit And claims saw especially think talked little QX. bit rise definitely of in is I that's dollar I a

we're for into looking now that So OpEx with And program it calendar to plan. to continue and on coming of and focus the the to year, us about opportunities previous comes our and we're in comment all back reevaluating again, to drive tweak for my healthcare ways OpEx. process next

Christopher Mandeville

credit fuel the was fees $X for to the that? between And the breakdown then The million fuel contribution what's and quick then And Okay. between costs, margin? in just general me. the two actual ones what quarter RIN [ph] card year-on-year increase

William Walljasper

Yes, stop the on was RIN I'll there. RINs so million $XX.X million contribution And $X.X sold.

I before commentary, that illustration probably Just to good get RINs that drive made calls the believe second margin. earlier of that, of in don't we've necessarily we part

for a some know sure, the three two years we we quarter coming from probably if margin dollar least in $X.XXX probably have I not of have fuel the last in Here a where years. RINs contribution

the million. credit credit was that's So certainly remain card $XX.X discuss dollar but press release the reason the question card And of other to of part amount those things. The fees the you this and mentioned XX-Q, silent fees. that we in happy was quarter

would the or coming for cost fuel You expense break that the from recipe roughly about be card want fees the company. roughly really X.X% about, to credit that X.X% to X% of the

Christopher Mandeville

thanks Fantastic, again.

William Walljasper

bet. You

Operator

Blair. Our Ryan next William question comes Domyancic of from

is line Your open.

Ryan Domyancic

for and Hey, taking good thank morning question. my you

William Walljasper

Ryan. bet, You

Terry Handley

Hi, Ryan.

Ryan Domyancic

growth case, that Thanks. had less number store? way And to is figures And measure impact the trips that amount sales? sales of inside any on an gallon or if lower is having saw if the the to kind resulting inside the then that there is what relatively is is the customer of for trips having the with the comparable is in So site? so on that we impact retail

William Walljasper

have we That’s we’re a don’t great of, answer that necessarily that very one question. regard. cognizant It’s concrete in for

to definitely this But it’s fuel over five as for we moving that. certainly do have last a just the believe a of four digital a move the to could that. in is fair Ryan, area, for lower have here answer Because nation. months the gallon have miles bifurcate vehicle and ability or course on. customers, you know downward we platform traveled trend, And will But the just probably but think not up concrete movement across on that. we our the probably get the stood we we kind have come hard that of of I watch kind amount

trend gallons with fewer bit, retail higher transaction. that higher fuel nevertheless. with And so we trend is to sure, little have per that a that fuel do continue might And the price. I tell to price, has though, of but for retail the a part you we buck can

Ryan Domyancic

That is thank fewer very you the transaction Well, gallons much. per there. number helpful

William Walljasper

bet. You

Operator

Co. comes Witkowski and question from Gabelli next of Our Damian

Your line is open.

Damian Witkowski

Hi. Good Good Terry. Bill. morning, morning,

William Walljasper

Hey Damian.

Damian Witkowski

in to going go back of what’s optimization and to the -- back price margin? lose just the to markets are willing -- just certain optimize fuel fuel the side, market Kind you on share

William Walljasper

we’re what isn’t I find as wouldn’t trying find trying think is balance. it market to to is qualify share, I optimization, Damian, losing truly Well, that

in And markets, the be terms so the certainly strategy. dominant I can you certain number player our would about as think we locations. pricing tell of we of in

against? maximizing whom margin but we that to we’re is, so need the opportunity. competing being sure And are competitive, still so are And we question the make we

So give for we’re necessarily, looking we’re is balance. market what share to not going up a

I really know you how So explain to to it except… don’t else

Damian Witkowski

No, that makes sense.

William Walljasper

… there opportunities.

Damian Witkowski

we’re an the that mean, Yes. opportunity, majority it realized tailwind in first more sort And XX it Is gains be then nice months? of beyond much should difficult, side? of look CPG on if ongoing sort at of still or Will process it’s I months? that the then the And you a be process. early gets those in XX

William Walljasper

strategy program on and the side on Yes, a of fuel there touch just so there’ll bit to on with now just think going follow We the Yes, the that whole we’re that’s mentioned with Terry couple touched I a be fuel retail procurement a things another business. of in is and next now alluded XX little talking time the the program right gains to. to CPG months good it it there. Terry dynamic there what our Keep pricing call mind, has probably about in forward. last in the

on we moving several depend equation the of pricing significant opportunity forward. which And so we’re the side a have fuel. of and direction our that equation, looking could the of currently the that will in a alternatives certainly purchase the pricing But we at in us opus to of the run quite are hire side of data, game just a on-board believe actually all procurement as securing And is procurement probably business. now maybe leading but fuel different looking we on drive areas, frankly to well, down we’ve the a it on different also analyst way the not CPG manager, retail only we really area our do

do without for. the And dynamic more we’re of type business one think the of take market any that’s itself as our but share. down I to the comments believe we I on And -- will fiscal to sacrificing talk so, optimization, lends year, rural opportunities of looking that about Terry’s follow-on the for further price margin and to get we environment

Damian Witkowski

then ramp Okay. And remind mature stores quickly the me up, on over what new typically just new store, period?

William Walljasper

what It’s we’re far. by period, definitely roughly encouraged five so in seeing and a about year

Damian Witkowski

of majority I maybe again mean, where sort prevalent? those are isn’t new new fairly are And stores of versus many those of those as how Casey’s XXX -- in markets, year-ago, a are

William Walljasper

I those a would newer market. I would say probably half of as are characterize stores what

it’s I several Now say mean, newer less a we like we maybe market, -- for Tennessee, years, those for probably states let’s mature in but say have Arkansas instance, Kentucky, been state.

Damian Witkowski

and talk deck Okay. the income about and stable the it the in Farmers pretty to and there, Farmers lastly, income basis? flow we that their And that is be Farmer then seems put their a cash presentation about a headwinds it like on talks [indiscernible] at because Farmer or year-over-year investor but I is -- if look

William Walljasper

that to is that can’t that are that to I there certainly perhaps we this were Yes, headed indication seems maybe true, upward. indication. I it’s stable at cycle say an the right, and be an mean, bottom of I be but if that’s XXX% hope

Damian Witkowski

Okay.

William Walljasper

that one comment the of equation side other on last the Yes, -- that.

is of where there farming could equation these that income. dependent impact on side other The the that on tariffs adverse have an go

Damian Witkowski

thanks. Okay,

William Walljasper

You bet.

Operator

Brownlow Ben from Raymond of comes question next Our James.

open. is line Your

Benjamin Brownlow

Hi, good morning, congrats on the quarter.

William Walljasper

Hey, Ben.

Benjamin Brownlow

benefit Terry kind and driving really the biodiesel conversion what balance the the to the that, you sites the granular gas you terms as -- XX between a the should look how combination the product pricing the fuel of are that on XXX Just of of that’s the to had? or XXX that at is Just a XXX of than the strategy of bigger the And benefit the margin. more bit premium conversion? product converting fuel give think the in diesel quick the a we and two at over locations, benefit follow-up a quarter that locations? Is and roughly about kind biodiesel I mentioned of little can you a was there know

William Walljasper

that conjunction biggest that. our fuel team store this impact Yes, and to magnitude, take having point. efforts at coordination look at operation the Yes, of with of I order I’m in is would kind the going the probably so when say team you

will other The be optimization certainly continue to us. product tweaks for

so the the less Just in fuel higher significantly this biodiesel way XX for the roughly quarter, by product. have an margins a evolvement an total, at additional that’s will respect impact the probably did impact is of The fuel stores would our only in say point. diesel, the quarter diesel $X first I with stated product of the million premium blending we conversions. to in than example roughly

those second going really However, XXX conversions I to and we future it do continue and product trying as down And will customer the comes quarters. what to to quarter in almost the Terry ultimately we're match here mentioned end drive we’re mean, opportunities the look to in for of to trying demand do. kind day at it drive CPG. this the to the is of right with

Benjamin Brownlow

premium relatively That's of it on par? helpful. the biodiesel? impact then diesel a And conversions so that is bigger with XXX, the be gasoline than the Or would

William Walljasper

two of par of those be It'll XXX premium be it'll conversions be it those be one and some necessary to products. will premium will all that, just diesel and some on it that would of and not to clarify

Benjamin Brownlow

the just other but And for last -- Great. me one the answered, most my on revenue of one questions were category.

new onetime a $X color there? incentive around million any of was there the payment from think I vendor

William Walljasper

to forward something the fleet of go common we it's with as so that program, Yes, card nature. have

we anticipate ran keep dollars utilizing the to forward. those that in market Now first going program mind through that we quarter,

Benjamin Brownlow

congrats Thanks again. Great. and

William Walljasper

Thanks.

Terry Handley

Thanks, Ben.

Operator

comes Our from Barclays. question Gilligan of Ryan next

open. line Your is

Ryan Gilligan

questions. thanks the for taking Hi,

relationship, fuel prepared mentioned aggressive in that does the to margin margin more on took up on markets, and following in traffic? Just the that in the while price you took getting transaction and you trends in-store you think the more I What market were overall more others. pricing how traffic some that in in-store remarks compared

William Walljasper

All right.

to ring. I we're increased gains our we one of that basket things had Traffic respect those evolve mean, is now. are to probably coming most with be an would trying -- of that, So through that right it

have about. took specific Keep medium across any or -- I that not. the metrics the are these whether programs ring right chain. we do pieces talking those we for definitely don't it's about have we're stores now don't in is or in we those mind all $X.XX what Ryan promotional So that entire And two the basket whatever, activity

be to would probably So hard of distinctions. make types it those

Now regionalize going is dynamic a digital strategy. be pricing ability going what the that's the will different us for and that to for promotion bring that's to and

And more question. bit granular very so at that we look have can little a

Ryan Gilligan

the Got price when that increase were response it. And then think you you you I guess do why was was donut? took bakery trends breakfast on strong. in soft think Do to

William Walljasper

No, couple there. things there’s a

So of the of softer into say That’s I a far category, helping has well and new that’s very initial a the Breakfast offset in so coming product we its softness would product Bowl done, have some the that -- donuts bakery. rollout.

pizza we well. Now that’s take helping a I also price the and slices breakfast -- did say pizza alleviate also on as would to that increase that breakfast

several test received of lines a new the completed just we we’re our consumer. quarter, next very the We think that about. in they’ll donut here forward going well by Now be excited

as also donut coming creation well. cake quarter the up are here be next We undertaking that a out larger will of in the rolling and

help I to believe great so that And value of propositions both be will those things lift area.

Ryan Gilligan

lastly just the that think how sense. the rest year? That makes And then share for we on buyback, about of should

William Walljasper

share that buybacks. right you the buybacks Share I now, can on tell

mind mindset. As are a million window plans. in not stand is we we now, call as The original what Board did Right Ryan, certainly another But these on and share that keep the completed year we executed $XXX creation repurchase authorization. I’ll value doesn’t million. $XXX you know our that up this change authorize certainly, two

Ryan Gilligan

Thank Got it, that’s helpful. you.

William Walljasper

You bet.

Operator

from Bank. of comes question next Our Paul Trussell Deutsche

is Your line open.

Paul Trussell

morning. good Hi,

topic very markets. obviously or back the store You but new I maybe performance less To better a what is newer in estate, to extent want of touched to just pleased back and the deeper that that. peel real locations on did dig really or competition with circle just on bit and little the

the stores are valuation environment? If standpoint also your you acquiring, upon about expand M&A be and that, that with overall you you’re feelings a just helpful. the from seeing what And that’d could

William Walljasper

Yes, that do data store the base, we’ll to to little bifurcate reporting so early maybe on of more as believe be actually on as that. bit cognizant new the definitely as the using get try Terry that far store are new for and more that But a data selections. a out store making certainly reasons Also we little performance. I increased that too existing construction that on talked helping well. lift there that’s have from data we up our team the as really a the programs that we focused strong those are have and learning from about

get stores the as down some So we’ll break new path those we apart. further that of with of kind so

M&A CFO, in think as as units. budget there XX, the about -- been necessarily business. I very not a is I tell and would reform, characterize relatively activity the As has behind which we by purchase people we’re XX activity, willing what that in far I get I conversations to and do disciplined mean M&A I very as acquisition believe a of had But people are my time and out robust go stores have buyer probably into seen tax is that more to deals, we buyer, to where to grew an -- necessarily now, still probably translate prudent activity, their some years doesn’t going mean call we was years distance of with opportunities that’s we’re have pause have that conversations one going acquisition the I selling think

that so we’re advantage we’re a take think good in to certainly those position and I encouraged by of things. And

Paul Trussell

you back. you and kind made? and unit at have taken Thank reduction to pull the post the translated per of overall you format, place us changes hour just talk And productivity color. Could about how and XX the of that’s the kind hour that’s on for then looking the given profitability, labor

William Walljasper

our depending so having we benefits Yes, there. roughly stop When idea, reduction some and -- of the mean, In operating of or a an you program. X% I on on to pizza that so but to of reduction that’s of from in kind I reduction depending seeing the hours, hours XX impact X.X% it’s the say stores on the referring category, to delivery hour give reduction, reduction anywhere cases and XX the stores. we’re expenses days

$X.X million to That’s As impact and on I bottom-line. last the mentioned was net as the in be tracking to bottom-line that benefit line call, about continues in a the well. the

Paul Trussell

of thank you. Best it, luck. Got

William Walljasper

Thanks, Paul.

Operator

Anthony question next Our from comes Sidoti Lebiedzinski Co. of and

Your line is open.

Anthony Lebiedzinski

couple are apologize my morning Yes, actually closings But reported the disconnected the as sales fewer as for I questions well so hour should I the you I store good of impact or the repetitive. questions. if times, say and the initiatives as the as far those got delivery of quarter? taking for thank locations XX same-store What your on a just optimizing locations. was

William Walljasper

be would about a it to Yes, X.X% X%.

Anthony Lebiedzinski

it, Got okay.

William Walljasper

on category. Depending the

Anthony Lebiedzinski

you you had are Right, for still a does a year, fuel than some unusual moment the talked about year imply medical claim it ago. OpEx at prices, guidance deceleration costs, in as And you I okay. OpEx far as the also the growth. know but higher those

achieve how year to that versus X.X% growth % here? help to just bridge of you the the us just OpEx reported maybe if XX So you roughly for as gap to expect could you XX.X% the

William Walljasper

fees that dynamic has as price comping those well cards. XX% the start in obviously Yes, part on increase less touched of there fuel this utilization quarter do itself can and of retail two an fuel credit we against card later things, Anthony, fuel credit much of the but certainly a to in the acceleration of the several and a price you on in are higher change year, certainly retail was higher lent anticipate we prices. The

We don’t XX% unusually healthcare, increase rest during that embedded In with middle looking -- a to forward at line the mentioned into just calendar at in there, quarter, year. a of about of conjunction XX% unusual. the actually trend of quarter, metrics the to costs necessarily go that’s the of the the high see You end increase claims that paid our say XX% with XX%, about our just for in a little renewal claims, healthcare being healthcare reiterate that’s the cost we in dollar a healthcare right high we cost couple are roughly was going healthcare, have I’d year. an did a

curve we see to long-term not that will QX that I’ll don’t incentive that some in an from we biggest going of that due not more biggest QX standpoint acceleration -- of plan -- then ran our so continuing something the be -- in those more maybe which And obviously get the retirement to looking provisions forward, accelerated that one of will at plan help continue QX, the the that year. at January QX, efficient pace. in that costs starting is next one opportunities through and expense the had to to Probably get will also be one, the things

budgeted our we works biggest Lastly, hours in the make and down in scheduling adjustment continue refinements calculator, drive one to to probably looking the in hours store. is

store fantastic but Our move thus downwards. and there’s job continue a they done to to far, and that that operations personnel tweak we think opportunities still more

are those back around to in comes half the year. operating the our of it thoughts about think to nuggets just when expenses So some

Anthony Lebiedzinski

And was credit okay. utilization rate? it, card what Got the

William Walljasper

XX%. about roughly still It’s

Anthony Lebiedzinski

All very and much okay. luck. well thanks it, best Got right, of

William Walljasper

Yes, thanks Anthony.

Operator

remarks. Bill in Walljasper further I’d back no for with And call to queue, any the to questions turn closing like

William Walljasper

ahead I’ll let, out. this close and Terry go

Terry Handley

accelerated growth value. improved you. the a strong you like our disciplined morning. our value strategy, And close reiterating our our plan. drive growth, this record everyone value And these for capital Thank allocation significant prioritizing value high revenue our progress. concludes by our key shareholders. Casey’s our track thank to forward will to This today, delivering creation with a updating Yes, to us call I long-term would joining profitability of believe return on continuing shareholders look and shareholder Positioning for of actions through initiatives call and we continuing to unlock strongly the and We shareholders dialogue profitability for by combination initiatives. through for

Operator

a the you for Everyone you conference. and great thank in conclude program gentlemen, Ladies have today’s all and participating day. may disconnect. This does

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