CASY - Earnings call transcript Q3 2022 | Casey's General Stores, Inc.

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Operator

0:05 Good day and thank you for standing by. Welcome to the Casey’s General Store’s Third Quarter Fiscal Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. Instructions]. [Operator now Brian the Investor Johnson, Business would our over Relations to Development. today, speaker Senior like I conference hand to and X:XX Vice President, ahead. go Please

Brian Johnson

you plans Before unknown over and COVID-XX. which from statements strategic and well and governmental conditions, the relating this the plan reports for and and the X:XX operations, supply recent ability intention or non-GAAP of well and of and possible to or periods, of call A or and constitute X:XX a increase Darren XX, referenced plan, performance GAAP January needs, statements as obligation available forward-looking Rebelez, that the today financial statements number those as Executive and XXXX. Steve factors the am integration Vice information, Chief us the risks, would Good Business any breakdown sources strategies, effects XX-Q, thank results Senior with on our future but statements, result synergies, any on are to expectations I during meaning otherwise. as third limited said, new our our relations our Officer; include duration future remind acquisitions, forward-looking or found be in results XX-K Chief differ Securities from are report business as execute described uncertainties and begin, may with the quarter, Bramlage, made a in Any our of views of or can to of of most you of of respect reconciliation disclaims to to this this our realize forward-looking President Johnson, company’s materially may known factors potential forward-looking actual Reform current or forward-looking implied quarterly whether that Form Investor or expense results Darren statements, morning annual Private future as filed to Litigation assumed the quarter at website. to our for results. third future certain quarter and liquidity events X:XX other chain, by expressed growth actions, stores, detailed update Darren? our related and investor to call X:XX by and call we to any during discuss XXXX. discuss at and Officer. within on strategic as us is our benefits opportunities, the future uncertainties X:XX on and today cause financial other including Form There Casey’s the now that to www.caseys.com President, revise of not events, I integration operating risks, reflect the of results recent With website Brian made the COVID-XX to as statements These like ended and Act related our the under turn impact Development. link. I’ll for from Financial measures third investor a on statements me the joining Relations call, With SEC to

Darren Rebelez

morning everyone. and Thanks Brian good X:XX

and but their the supply by for I’d issues XX,XXX overcome thanking to like Casey’s with the resulting COVID-XX ongoing chain forward members tireless to continue results our our team start well in as geography. sharing to conditions efforts as challenges we as weather looking We’re in our moment, a

make the to -- especially situations for. proud and life and and navigating is guests job is our team's the At better members have day. under Casey's perform for grateful of X:XX team to through every I'm Our outstanding circumstances difficult ability done communities something an our these purpose

progress acquisition commitment with a is the activated we Knoxville, support responsibility raises once to all employees the privilege we food strategic Feeding campaign to the local guests in it our raised partnership over America. we our operate outstanding a rural pilot over and in realize underscoring our Buches Hunger where communities. footprint role We're Tennessee strong to appreciate expected on supported the near-term Casey's by ability about will of excited our improve. are This strategic communities members income in, this X presented campaign in Inside on third current be In both significant X.X%. synergies. in operate. our by dollars compared the fuel to the the the third issue to release, prior build community the and a February, year. our as effort. continued same-store a welcome million center XX from towns year. team to Circle-K, commitments help X stores in sales environment Same-store accelerating inside Haute, strategic a record to from challenges I’d and hunger in X.X%, the fund out with personally we prior deliver a sales Indiana. closed unit to increased we and XX Overall, to operator, our your made will become strong guest were we track share $X.XX [ph] an year's The funds and We're real up this million, XX% existing quarter. our XX% year partnership partnership As we're previous as of energy's profit We campaign X:XX and as again monster Net highly fuel play confident the take like market, $XXX managed our X:XX up quarter those through acquisitions results. sales into evidenced us integrate our our which Knoxville in prior was excited million the network. partnership press from will integrating a we further part those $XX Terre Diluted in that banks Tennessee was third breaking the we've Midwestern distribution to appreciate growth. traffic continues supplied $XXX,XXX we be million and These the quarter, of the who stores and of also you've As were Total in $XXX third and In the earnings gallons -- for in year. to meals. gross delivered stores seen heart. family. per increased our

the fuel approximately up operating turn Casey’s unique X.X% around two-year XX.X%. Inside quarter margin margin the average higher categories. to competitive the margin categories a up beverage in was same over XX%, Alcohol detail perform were This partner to $X.XX was from a quarter, per done to across basis. impacted I’d X:XX partially XXX versus XX% to ago. prior and call prior an as same-store which hard XX% to the to and year. per year, of fuel, to as period advantage Steve by quarter, supply our margin the sell in basis volume margins despite fuel remain In XXX some by costs. on increased view up stores X:XX some price like points X:XX during were fuel basis expand remained beverages to to continues close compared the as company's up adjustments able This X:XX margin the the fuel with menu over two-year increase total reliant increases. with $X.X profitability We to inside period of team do of for and sales were Same-store despite up basis. compared up were due slices for a gallon, prior broadened by on licenses inflation rest cents stores, offset these year over for chain all spirits offset a sandwiches the and September. non-alcoholic X,XXX like the challenging that results X.X% in a stack challenges sold and of Steve? XX% We've and grocery in industry and the share same third and mid-single continuing were long-term general a the to on breakfast quarter. Pizza financials. navigating year the liquor adversely salty scale margin remain of assortment trend, in issues. details great The relatively breakfast over the industry. inflation, results. up chain year the dispense now Our in were stack it collaboration. well, category. merchandise and is to average strong margin the flat favorable we challenges has price from XX% to food performed inflation same-store down fuel is team Fuel digits the ago. same-store our X.X% upon per last During that cost our the XX%, gallon, I’d continue go driven growth significantly price Non-alcoholic being has hot balancing sales up of and our and each The snacks, environment began We've optimize the shows of year supply strong, go volatile of with margins an the relative by prepared points alcohol. to Same-store sales exceptionally to margin despite well now XX.X in third perform sales average supply a a quarter. chain to gallon, making a beverages X:XX comparisons supplier been tremendous the relaunch remains and quarter, X.X% part while approximately been the -- menu over of Margin job into work leveraging gallon well.

Steve Bramlage

Darren you good Thank and X:XX morning.

team of to I throughout to $X supply also chain challenged the entire is the various strong business an momentum rose sales like environment. the with collaborating billion operating acknowledge into the engagement fuel, Before inside take the quarter. billion. inflationary and managing from or the XX.X% which partners all company with cylinders on jump from year and stores, Total merchandising $X floor, the to the to guest billion, financials, minute marketing increase $X the given from revenue fired our Total a to prior All approximately was XX% the quarter our year. generating prior initiatives. the manage strongly The for this performance I'd while

XX:XX favorable increase sales $XX operated by stores the rose price that prepared Though more note per sales to million and gallon. of were XX.X%. are we in start prepared For increase million the in Please an favorably responsible quarter timing gallon this of in as increased million grocery food XX% were The This during to acquisitions. team product and basis impacted from XX.X% grocery beverage due non-alcoholic prior and are Retail $X.XX Buchanan is occurred $XXX saw dispensed merchandise XXX is fuel snack finished and across point costs mix down $XXX able sold recent higher sold, normal of was well but fuel stores. prior XXX down up points and serve improved from cost cost ingredients not is As million prepared to points than partially dispensed million and higher general LIFO to merchandise year of of impactful this ago, categories. $XXX XX was beverage remodeling $X meaningful depreciation for margins. that in increases not goods. offset the increases food business, impact out driven revenue compares reminder adverse XX.X%, Inside team had food beverages than Cheese to negatively the proactive Casey's the fuel to We of more was the quarters increases ago. items, line profit reported and by XX.X% profit costs prepared decline our pizza the margin The fuel profit of favorably The kitchen amortization. was a the in a price was year an as included of the driven than margin gallon other particularly $XXX single general period was a by increase as selling $XX of a $XX.X point these have a of cost of to by XX% XX% the define $XXX higher the and an revenue or well increase Energy the was this XX% as sales less results have quarter well a LIFO merchandise of and gross a impacted to the round comparison XX:XX our The by function profit The excluding made menu due third year These food also for inside inventory a to gross increase was that gross did prepared non-cash per XX:XX as during an to and majority gross by category the year. as mentioned. a beverage charge. cost profit. include as is $X.XX item. higher an taken dispensed impact XX XX quarter. sales price points which from did store should an margin scheduled that the dispensed installations total resets. X% new as Those as impact average $XXX well and gross to approximately profit third margin Inside a a pound $XX.X the We last gross we around a of until food X:XX increases The is months. in retail the was ago. pound, do retail increase year. from acquisitions beverage last million menu to basis of vast year-over-year quarter, impact inside XX.X% year. this toppings was last anymore in discounts XXX up throughout goods significant of to merchandise I million beverage figures with million, increases in increases food margin merchandise basis year a resets the costs This were million, wholesale XX.X%, offset margin previously tremendous fuel basis on driven of positive in quarter, gallons, basis. and basis increase the of reported the a normal our points and of XX:XX by or average costs won't job nearly less charge and increase existing from charge per compares impacted dispensed that offsetting $X.XX from million, I'll XXX and cost significant mid-March. or million, Prepared all higher our

Our our are challenges chain in company's still disruptions. disruption glazed the to experienced be second items acute improved supply generated carryover dispense quarters. supply over and profit COVID increased XX:XX specifically grocery food cups, beverage. While the to gross gross prepared continue and million. within All $XX.X profit experienced an since $X.X the beverage RINs increased dispensed by gross million, previous popular short were RINs. was partners Bakery benefited doughnuts have sold $XX million as no of vendor quarter, and Fueled notably related there the merchandise sale food prepared profit in our from quarter and from general

Total in unit XX.X% due expenses, lift We prior credit a were up offset also we gross due OpEx is points. the Buchanan to rate we more to our by hours were excluding $X.X in reduction that store second card or saw operating with a quarter million, growth, XXX quarter. of and the million Total X% is This X% carwashes reported expense acquisition. Approximately which operated expectations operating up employee activities due basis XXX the Approximately same-store because other increase of by consistent third stores worked. year. X% increase reduction to to expenses acquired our expenses Energy and profit. fees dealer the from primarily $XX XX.X% network several was the million is from than growth and is $XXX and in operating that

of cash ample available, strong. and Finally, million credit X% distribution $XXX a capacity million our rates third acquisitions were finally Energy, us accretive operating $XXX additional sheet fees in accounted million. Our Buchanan The wage same-store of the Our Circle-K debt industry. for have acquisitions. of taken pilot XX.X% the placed pilot remains center primarily store tax compensation. and due on prior January the our XX.X% the from year. quarter is of recognition we the up mentioned in XX%. the The of rose in timing the up a for challenge done were lines $XXX with versus that higher expected. and and cash XX, more $XXX.X our XX:XX also in The X% and fuel level were prior million, Net the a XX:XX with due compares of $XXX.X prior credits was driven expense primarily by fund XX:XX million, the the that the year in new in was into great year, year the efficiently to quarter in increase up year. the XX.X% less increase fiscal in of prior the quarter and tax the incentive quarter $XX.X income associated right service was year. The year. pressure the store Buches quarter to to higher giving year interest prices earlier, card prior and operations equivalents is expense to compares XX.X% stores in effective the $XX the million, in operate quarter job the the to impacting the in along to driven credit increase compared Net EBITDA retail as was due full another team Store to to all Depreciation balance wage the in ago increase at the has and given the prior growth start million the of million XX:XX liquidity $XX.X for we rate was by EBITDA a

remained of and the first post and the second Our X.X with closing leverage the ratio acquisitions, times consistent that's at quarters.

is For purchases prior for the in in cash by million $XX taxes quarter that compares of attributable the of to in flow deferred the which of cash the to less million, part the second temporarily Board This net flow. this were generating the was year Cares equipment using payroll to million, we primarily -- company March quarter, federal generated per maintain $XXX our and the cash decline the share, unchanged from XX:XX $X.XX in quarter a activities slight property million dividend meeting, $XX The Directors voted resulted made the of $X year. quarter. lowest, the quarter, payment of At seasonally last as of Act. free operating of

EBITDA and We investment and will forward, the into going accretive balanced opportunities that remain capital continue ROIC our many have. towards opportunistic that million share allocation will of increased Board But continuing to consistently cash growth approved to and we we The and and regard. remain $XXX leaning to dividend. in two repurchase returning this recently shareholders our repay times related through gradually authorization

was for the The single quarter fiscal we CPG store. in for below year, quarter this end same-store and far the XX are Fuel date. XXs and XX:XX mid-single new The up year. to fourth trending Casey’s inside company off the low-to-mid fourth maintaining of is that start, and sales, disclosed. expects previously its Quarter digits the expect the has digits stores. margins to currently through opened acquired good continue fiscal fuel has XXXX XXX that company a is the to outlook So stores

been from items year. for continue improve XX% expense in quarters and quarter have we We prior the expectations operating changes expect to between fourth expenses no to control. There that our increase to versus prior XX% operating

turn retail the they levels retail than would the Ukraine to from at to push given to in Darren. fuel continue are fuel fourth continue XX:XX current prices, current going to in However, in the of card be year. the the higher have high range. should we And at end that to conflicts recent I'll prior of be fees rise earnings net potential range call The as back rise. quarter we expect us above credit over the the Regardless, prices

Darren Rebelez

XX:XX Thanks, Steve.

and our our future off positioned our shown of starting country business resiliency tremendous really you to shareholders as strategic As closer well see take the in deliver gets we're to to is to wake has pandemic. throughout normal especially through plan. can value the Cases the COVID,

result last of year were showing experience, was addition As to positioned food tobacco. by Overall, up items experience of patterns a traffic signature are forward. the quarter great any reinvent a increase disproportionately traditional daypart the XX% expect our create talented improves. are Digital same by in to The in to to and menu sales. in the likely kind compared poised morning is the products, relaunch and with reminder, a breakfast This as such digital the efficiencies, cases food to with our XX% X to is guest sign further through business. industry pillars believe well benefit. and were resurgence sales program This same category COVID pizza third successful quarter, top on core not lift impacted a to of a In All and Casey's in guest this percentage team. daily year. is the outperform. coffee. beer innovative items be from XX% burrito as guest investing as due down. our disruption store culinary engagement traffic heavily prepared pillars example come. our prepared we've of strategic our bean-to-cup of new of mid-teen XX:XX toast signs you is out are such disciplined X growing which can will and new up in plan bolster for we've be We're growth. The where the made was slices and moving breakfast the to the innovation our handheld our reinvent program traffic, commuter slowing progress supported guest convenience like We with loaded the items XX:XX Our experience leading capacity a the rolled to store begun quarter things more

Our continues million grow now cases at rewards members. and sits enrollment to X.X

party to XX:XX pickup have Finally, had our efficient curbside personalized and all addition We X,XXX never means more have for for convenient to our partnerships communicating than We from accurate in been and our other stores with aggregators, over guests scratch guests. offer never of some we now stores, of third it's now. a our to that right have more our with try guests items. offers made pizza sort service our of delivery in

for difficult year We're supply the XX:XX instrumental category. of the experienced general and alternative Our today. inflationary are our current to X% helping longer-term system private XXX at only us We environments, of our new over and rate self-distribution Casey’s quality, environment way. products mix most the products currently is our guests branded that seeking Our share. efficient also relevant merchandise currently ability achieve penetration items navigate the through with experiencing there one in continues grow program chain on affordable decades. the market country goal the the but trending XX% particularly value. is to This label guests take in of of our a more in exit our Not in high are and grocery goal offer has are are confident for been items in

operated geography. Joplin, to cases into of the our also stores Considering be call support network reach digital significant in us the a stores don't center food that, of investments customer in guest goal efficiently our We to you've more to home. our competitive XX% particularly engagement, enable allows private new I operators or prepared position less. as stores in or our via expand owners best Missouri enable believe smaller often XX:XX continue to is acquisitions. advantage, communities make store. will new advantage recently, the and scale to grows is XX have more of Cases help in markets will in food margins the provide leverage retail, organically construction, proprietary program through Larger mentioned us to with XX:XX convenience just the program, deliver the are almost self-distribution, America we capabilities coupled existing with the or to store distribution [Indiscernible] units label brands. this inside and within operators omnichannel prepared new rural class The Our our by fortunate where witnessed

have to take that only on we markets. white and are operate come. contiguous space busy Our healthy in on team current chain stores we X,XXX uncertainty, challenges, Income grow more. significant is shortages, tremendous many our our sheet inflationary footprint labor acquisitions business, more states deals supply have our roughly is of been with incredibly has our consolidation poised in, industry, to executing dedicated XX:XX M&A of about and in to Given for X in an tax pressures cases in X significant ready brought and XX our balance both within

capabilities the have added has Centralized are procurement, the Casey's we've we strength XX:XX as on business. begin just and business. really insights fresh the possible Casey’s. talented recently a a this So find to prevention, the business talent new strategic The pandemic come Now leadership some finally team we've to you'll and consumer that none of the long-term the outside of emerge with would model of assembled to I to new perspective and think normal, our from the embrace team here been the forefront. in of incredibly without loss plan leadership

answer a right ahead prepared now we believe on also your about and to the to the future We while team value, We're impact have the positive in excited incredibly communities firmly strategy place achieve we and are long-term making shareholder questions. serve. sustainable

Operator

But please question XX:XX and one up. Thank you to one you. limit [Operator follow Instructions] yourself

Our from with Karen Short first Barclays. question comes

open. Your line is

Karen Short

very Hi, XX:XX thanks much.

start will short increase by first question. quarter, quarter, Sorry take in you on the wondering I and percent the impact how off giving that you this I'm impact picture? color think the then or said price that price, term just took I the increase you and then March, the price bigger other two actual the could comp this a little for one then will had and But you if that anticipated this in comp and

Steve Bramlage

the that. XX:XX is Steve, This so the you resale Yeah. goods I'll course a board across and for Good Karen. the our about We if with over of cost incurred increase of think start morning, across quarter. took fair, X% layered the day the price, it to the quarter a they course quarter, of all and percentage on increase kind comparable didn't the be we was the over in occur of in of about first

bit But was and net that. neighborhood March, will X% coming increase, price I roll of prepared into we X% will the won't quarter. food going we -- average, absorb increases then all little on than most the our to somewhere those be a across in less in mentioned that a in So are SKUs that But be. the number X% annualized, of the and that again, what that's most current to of of

Karen Short

the taking the about trying grocery, Okay, cost beyond – margin XX:XX a decline to place, would increase? in in more think Or was when within about obviously, so maps gross just how margin a so but gross to maybe think foods, XQ? I'm beyond function, that so much we would that say prepared you understand that be -- -- to lag

Steve Bramlage

worked the oriented through in coming cost on of land that couple and the on the the -- little I the we much I supplier prepared so quarter would and about -- with business, as works where contract nature retail us just particular contractual prepared is good that for how those more heavier XX:XX point closely in think tends out your primarily it of sense LIFO it in to up, and really gonna We in correct. through the that lag. was business the assumption the impact annual of much the were lined our pretty is charge a mechanically up, that was how the just time business, increase side, had on because I we're increase the Yeah, us. an and to act for partners, we're commodity for it's grocery bit is aligned the less food a more able much tougher to started over contractual business exactly adjustments, nature so we cost last line But enhanced months same us price think food side renegotiations, by

Operator

XX:XX you. Thank

Our question Stephens. comes from next with Ben Bienvenu

Your open. line is

Ben Bienvenu

thanks. Good Hey, XX:XX morning.

of prepared you there relates Two associated typically, Would quarter? question expense question, any with take and pattern quarter, where Karen's case was but just LIFO backdrop? LIFO food commodity that there's expect that part to from as just on of the this up charge know you kind the declining XQ that don't that are have we a given the the on, the be to isolated much I'm I margin? the if subsequent it given to dynamic say, would does sequentially then, so as that XQ. following then one, charges again LIFO seasonality, and margins. wondering it that prepared food you year, to is in Just saw

Steve Bramlage

actually often so through the is when and a a grocery take take non-inflationary do of mechanics is much This is come is we're business just Yes. because to our on very renegotiations that you because and LIFO. way minimis they XX:XX be accounting that X almost the year, item. We de quarter, obviously in of really I’ll every works, tend charge we on way with kind about start and talk the charges don't the that that so all hence, January began LIFO them in January X they environment, -- on a that's of of this – the environment so I'll Steve, calendar a the you and

right our in be as a food as quarter, bit weather going Fourth warmer role. a from at blend, most into move our be tend tobacco, end acute little just -- it's the this geography from business given just to on to margins it's year, typical is our inflation, seasonality get that's tends that the to the question again, a based the because for To quarter, comes fourth our frequently. would most item more be margin third of general our months we of those of the us, accretive -- we lowest margins, sure, the a size adjust we more more standpoint. LIFO of -- prepared a through. But to your quarter For on as

Ben Bienvenu

respect you etc.? Thank in and anything, down, just hear. know it's to set. XX:XX trading Okay, from to the – my pricing with you. you. of That'd I customers, migration if great. Thank to across seeing related are is your changing What dynamic. is from your elasticity question rapidly increasingly to kind helpful price your you're the then relative -- backdrop customer sensitivities store, seeing floor second in And taking the categories any day-by-day be the

Darren Rebelez

a from we’ve and and seen the and as that can this unit both I generally increased -- standpoint as price. – would good XX:XX and speaking, from Yes, business inside is see say, seen you a as Darren, blend well of velocity is momentum in we've the sales

So, the mix point more have in private would can is, you seen with, products that and start at to we a one ramp I we're shift brand thing see pretty this But that recently bit. balanced with respect. say a

really probably we that because our items than down. national brand the higher trade private in brand. the to in benefit, is penny so experiencing are those accrues And actually some profit But

that's strategy and our brands. So private per with

we So X% rate that -- right around I hit narrative like and exit the that earlier we that seeing goals. don't we've mentioned mind in actually,

that couple think, a we’re that from of shifting. on mix months schedule So that is and important ahead I

Operator

XX:XX Thank you.

comes Bania Markets. Our next Kelly question from BMO with Capital

open. Your line is

BenjaminWood

down year. by question. this first XX add Bania. Hi, taking store on to our Ben significantly on your Kelly our in you stores XXXX you'll in goal, Thank XXX from the which Wood guys. I is hit for about math, is to to need XX:XX growth This wanted dig stores XXXX for

If potential Is So to not year? target another limit ability lumpiness XXXX. does acquisitions grow upside about store environment? you're the wondering target this year stores next in how of your number in to thinking that possible this XXX

Darren Rebelez

Darren. yet, we hit aren't base impact to question, next do the we'll XX:XX the start guess three-year period. we this And highly store year. the our ability grow but or commitment so this confident haven't I given the answer to three stores are more is, of ’XX XXX bought over the guidance I'll deals acquisitions your year going to that for our fiscal second -- year Ben, we is

there. don't store acquisitions could to so -- so and that's that really, do growth has in here. And, with of XXX lot have concerns it respect with things. any another we those and and we of A to So do the timing

ones the So that for what the we're are sale, we But ultimately very price. is in somebody -- market. when that and not active at control

right to they're M&A day, I before, now and like smaller lot frankly, more We of to for able operators through let do alone a be and becoming current this -- and team, effectively compete. difficult having conversations to dedicated it's mentioned have environment, a current just more the get

see we But the remain assets what a pay M&A where pretty market. to -- about buy, going we type we we we're and So, buy disciplined of those that for assets. frothy we

of is capabilities. growth the this to along M&A with have So we one like organic reasons

growth we the don't a assets, that assets of direction. having for overpay or rate keep So moving wouldn't ourselves box the in force those just otherwise buy into like right to we to

Benjamin Wood

the store it's out same a items XXXX? but part. know you menu? you much recovery? trying traffic how is That's, in quick the how -- you. bit, that's the part And date the that of from of pattern day I to very to new the relative little Or breakfast just sales? thank XX% one increase Like Just Okay, could new much mentioned then figure XX:XX that a where's breakfast guys helpful. just on

Darren Rebelez

guest craveable, XX:XX media the is toast menu result we menu, [ph], and price, program we highly you we some else. can't it, highly Well, items. pizza is that launch unique something which leverages our get we've same value affordable unique got made put what anywhere scratch did item a think product at have I of tell have news, from dough, it's it's we the are you the behind I is and the some something time. new traffic upgraded The it's it's And would coffee -- it's

those But improve -- and traffic and in not gets a together, -- breakfast prepared to load put combination everybody morning of benefited the cup food we day because then will which started we the that the across complement that not buy part store those we burritos, the So item. that entire the some to toast products. other people food sandwiches, items sold we sold store see

and think I both I accrued mid-teens really we during traffic morning said our part. sales Like saw the So increase in that benefit. day

Operator

you. Thank XX:XX

Chuck from with question next comes Northcoast Research. Our Cerankosky

line Your is open.

Chuck Cerankosky

kitchens. bit little I morning, everyone's, want about Good XX:XX great quarter. talk to a

can you properties? acquired to schedule us You have with the you a kitchens provide as add

Darren Rebelez

could Buchanan what we're and up as store and so permitting seeing we those up far can I now of know, where suffice we're follow get roughly now soon it contractors But on of put you. we've available share you, lined front XX:XX can performance kitchens we in Chuck, XX a schedule And as don't with I'll the in of done those I me that You kitchens. have the really with say that. in right Energy to we happy tell in

go we're those if volume normal you XX:XX in you tell more just out less and we the lower that little and the what food where If have relative our volume I that rate Omaha than would doubled you at were to Omaha industry particular, doubled where prepared -- what a Chicago would program is expect, an above we're also to the in food I what consider Now, we've where market, the food Buches, already the than look stores nearly more known. average suburbs, stores, would known, at in I brand continues in seen those run into to at the be rate so an would I -- prepared grow. our prepared

all in acquisition, be pilot this in probably those conversions. be So those in converted. remodeling we're -- stores having get it'll -- in it'll But in the next will the Circle-K of -- the great There to in calendar the year. bulk success and particular kitchens the

Chuck Cerankosky

got you've to way of out a that stores. it? XX, So XX:XX good Is done look acquired at all the

Darren Rebelez

the stores of in energy, stores in the we're actually Circle-K the we finished Yeah, the remodeling changing literally some of and XX:XX Buchanan where control then at one recently. pilot as -- just we speak the

on process really started So haven't -- yet. that gotten we we

Operator

you. Thank XX:XX

Sachs, Goldman with Herzog Bonnie is from comes open. line question your next Our

Bonnie Herzog

And we look you. and think suggests everyone. ask CPG few you mentioned going. days, I are sharply range XX:XX very they All the at in is margins, past to right. gone the about I trending mid remained up morning, fuel to have outlook keep wanted certainly the But, going which has Thank elevated. guys, Good as quarter-to-date. crude XX, you

could hear filling conversion which a you or give negative, then you the just couple in even so of curious, pump, that. So weeks? just record few fact, of Honestly, sense evidence their us couple margins not and simply last of few levels turned of stores at I've weeks? trending? I'd or be the a if consumers, fuel seen they've And And, then places, last and of days into up where given guys in the and on are in a have any to prices tanks, gallons, curious fuel decrease your seen in

Darren Rebelez

underlying not margins, know, XX:XX certainly unpack we're last of has that where up hearing because negative Hey, experiencing we've all you're to able seen try be the Bonnie. This is been box and days over to of cost gone I'll aggressively. What Darren fuel to seeing I'd fuel so also we've far, on kind curious that. that street the price here. precipitously, is couple anything of take it's I'll pretty about certainly, or this just and

to last behavior not afraid than buying gallon aggressive it more see buying, point. so balance week, to will because this really opposed margin of that, be counterintuitive, but to we've when is to prices And the rapidly gallon when consumer a going And able like aggressive we seem tomorrow from you -- standpoint, out the at $X.XX be that that tends over been people it's increasing this more have a today. are as

far start to opposite point hits people to some a or fuel had line increased lag and beyond again. and of happened XX:XX we'll been the where Now, had going all normalize trend at peak, this when tanks current seeing it volume, week full are gallons our a effect actually we're gas to prior have they'll our So so where going happening. see

seeing So this -- and outlook. talk in I wringing. more the short-term some of into the to about else context we're bit is But bit is situation everything broadly little of what put some I -- a want that's kind hand a because little headlines into think it

XXXX. when out Certainly $X gallon. of the a was $X.XX time $X time – gallon a think been by gallon. retails gas, peaked crisis, today’s a a July that during been $X.XX at was in about long a it's hit we that since -- last US. And gallon today's so the in you But be financial By dollar and it dollar, would it's

$X in at Unemployment, to saw dynamic gallon when X% the growing starting volume. ultimately at to people XX%. people of equal, talking in at really we see taking we place before a pretty significant gallon XXXX, -- to and get and a when with we destruction. So over some to to the we we're starting also XXXX. Now, was to bring on today, to to back that bring fuel situation same time. -- work. lot that recession work, the compare a But and there's we're you XX:XX a start When did see demand labor people -- impediment all that gas, a $X created other aren't time look you have $X, you X.X% rising, to we well unemployment, structural about not to shortage, would There's back getting start need companies

is, think which right gallon is a a change the the is it what price of now. the prices describe that national there $X Midwest we people than $X as gallon, point a lot don't fuel are geography by is is our so of about because our $X.XX and in $X pretty across ethanol I'd below $X.XX trading Now, to goes the over we on be a will the the retail influenced for to and closer and at And of low numbers the heavily which well But now Northeast or just behavior. market, Coast, start to numbers gallon national price really to XX today make ethanol at and last West a to in then gallon others is tends that right blend Midwest, we $X part relative gasoline. sitting a under state we're in are here sit

just differences have allow retail some of the in And at country us so maintain rest a we lower structural to and margins. the they're that and than maintain the footprint, our price different

Bonnie Herzog

you're Thank XX:XX for other That's that year income that see that. one super low progresses. question makes for as Maybe on for about year stay, How giving fiscal question yet know and for you But, top a ability I next a your helpful your the expectations And me to year. year. this the trends lot levels the growth only guidance. just to your guys crew do the high level fiscal final at not consideration you feel how given I year ‘XX? sense. quintile maybe of EBITDA is great you're, elevated deliver to guess this color. consumer

Darren Rebelez

several are in event the is next aside, from like crude a a market, on the the that's you merchandising to futures versus haven't the down I dated now bit that's, like actually you is situation, very we Bonnie, months But ability in in believe Yeah, to traders XX:XX short-term We've think, a know, got given going and backward, that right -- do crude going events, situation standpoint. look up. this at deliver that commitment. on that which is trading heavily, our market And little of oil the go pretty any when still guidance believing still, yet. come we're lot how more implies confident I

really situation to and years the extreme destruction seen height of the going last have with demand margin fuel course that's accelerate COVID. We've the the that just to really over to operating think aggressive at saw higher happen several pricing. still, -- it the able it operating COVID. the through But margins when So structurally retail fuel be because plays at rate. costs, is We offset We've the in extract see of the seen costs higher. a run in accelerated of to industry are industry, of I fragmentation out. where have to how we'll that business to still higher a the they And

growth going EBITDA then So to persist those everything margins in we're that on perspective, we've and confident are very got that on years. next deliver several our of ability those believe we type else the we over and and layer to merchandising our going that from

Operator

Thank XX:XX you.

from open. Our next company, line Anthony question your is comes [Indiscernible]

Unidentified Analyst

and XX:XX taking morning Good thank question. you the for

guidance, retail terms that credit expense encouraging to likely guys prices was in going the the able see the it So with of even operating fuel up that guidance, you were certainly card to hurt reaffirm and to fees.

a what's X% reduction factors there So far Is Or quarter, expense that any to are other you know I hours. the as they expected play reported operating driving in that? continue? had management? store at as just in

Steve Bramlage

in fourth OpEx we're the rates on remind XX:XX did good Nothing the are job organization really nothing very that charges end and in think our is managing reason, will hours some in really But are we our need the do year, a going will -- new we hours Steve. etc, there's morning. all job. have I'd putting percentage wage in into incorporated Good our with associated we did equipment in a on good, a on Hey, take regarding I competitive store part changed naturally that's expand Anthony. We off that. markets impairment what already, to stores the the markets, the the within one will the our I'll confident so we things to This control you, Managing pay know, start a continue has with the regard. efficiency good we've lot we that store, prior focus at in expectation within operating a seasonally. some of today. I'm handle in quarter. that to the hours for we good quarter, prevailing tick those down we're of

the would significant as to not we're fees your I associated a recur. and it, good to tick point the as do will thing credit at relates extent that that be pick at fees, today with only dollar ours. it range variable to our our sit and card that, real which would the in there's risk gallon on of up Anyways we number But think associated a the don't I think $X covered guests credit so and which here as retail is believe prices, -- in card the this up, with will I sort here that relates quarter. So

Darren Rebelez

labor hour Anthony, lot And managing that are, the one XX:XX is and hours are same time, labor mentioned perspective, gone were quarter of is sales a they and the about done things I we by gross the at on really we productivity per productivity in just increased profit the Steve in up team in a growth. the so job. XX% really saw And has from that a the the dollar build team you traffic operations growth nice

and they were sales efficient and to they the So a guest really and still expectations. deliver on able were very deliver -- controllables the great experience manage be

any we and so And, to So very that of backslide. see the most as OpEx, we team. with under part that's reason significant happy that believe And don't that our well have control. we mentioned, Steve in for

Unidentified Analyst

it's to then for it? the switching Yeah, side. that over, just the Got food color but prepared XX:XX thanks and

with you So, changes the given changes, notable you your successful menu? been planning have how do to any rest are the of menu breakfast to

Darren Rebelez

about food particular, those and part Anthony. different a optimization We're detail. as innovation a sort their the things of mandate. works. XX:XX of in prepared at are talk absolutely, -- in any to got always culinary Yeah, lot of not the team of prepared the today looking in we've team But and got We've

have definitely this that talk yes, at but we some point. to about so things And coming, not ready

Operator

you. Thank XX:XX

Our Bank, line your is next Katai open. with question comes Krisztina Deutsche from

Krisztina Katai

at you, XX:XX communicate your rising benefit finding price Hey, the are and in and could we're quarter. just you that they thinking of congrats especially cost peers, gaps the their guys. that gaps top you wanted offset, loyalty versus start a program to do And And really good prices their fuel, with of Are layering have operators mind? morning, for raise on operations? widening stable? to we're when when I about good looking customer smaller the in environment? your a to price Are your net stay current about, be that on thinking the to just

Steve Bramlage

low prices delta price market, the and Christina, price to our look look Yes, XX:XX the we low we're price and in differential price to at maintaining market. when versus the seeing in we're at when, so then that the we what the as our the our is, average is high and

position, competitive see price in is our to the we -- more starting a that starting of market that out maintain versus extract need that we bit are they to typically to operators So smaller and because the really differential a high the margin. widen reflection

to tend that. they so do And

is would and peers. based data – we've what able on public company and our that we from look So we've when from we that company perspective, a seen quarter fourth to what share and share are our our gaining opus and some be gain calendar -- peers at normalized our for public quarter to

we in X%. we're prior were nearly down they've two year same versus up the reported The store gallons and other

that share are believe of of the we So larger as operators well. some we even taking some versus we operators certainly the fuel, among and the are smaller

Krisztina Katai

it. coming good about your of in you to really business Got X% January, and it bit said maybe implemented a increases like, just, another helpful could little you X% your really but price That's core customer, if just about -- in XX:XX sounds the tackling you health March. talk feel you some

-- some are to planning in your they from spending a in that of seeing? how kind the pullback the for of and are we're financially inflation how any business customer feeling you from response high potential Just

Steve Bramlage

$XX,XXX some a accelerated most guests shape, -- the good lot the think have of -- about pretty increases. wage over we now, is consumer and, right seen of in the our make of Yes, those XX:XX in our a year, XX%

so environment. making they So we seen our inflationary guests. -- in an actually core But the haven't to dramatic in historically so they're lot more among a -- have any behavior they're more than having in also spend now, shifts far,

future there's is One private affordable label mind. do to okay deeper a which we're really they're is there. more -- there's starting think that a we our really for and value. we people from to looking in perspective, have things From portfolio, off seeking -- a keep So take provides couple alternative

and higher in happen to tends trade retail. our expensive like that industry more times beneficiary the of thing or from in other The this of forms we that are downs is

So really prepared you feed in is whole in a for casual, if you value particular, service XX:XX certainly great our so were just $X our full dining, a and more a in food very an $XX So and under relative foods. pie about prepared already pie, other that's to XX:XX option. when people concepts, family. when X an naturally think about then, being a offering to to that's down pizzas, compare very QSR, specialty at X for and In restaurant $XX, can you much breakfast around that today, QSR, example, a -- get affordable it can $XX, easily fast that a a trade think value-oriented you breakfast menu,

prepared of have see disproportionately this environment benefits value. kind platform our more that we seen to start consumers as in historically food So

Operator

you. Thank XX:XX

Royall John next line JPMorgan, comes Our is from open. question your with

John Royall

XX:XX Hey, guys, question. for my thanks taking

that, economy the had thing you persist So time, there some or than are risks commodity a worse oil levels some lot depending things addressed. the mostly is on forecasting, which couple like guess, better of to a remaining think for these of I downside I'm with and of and only you've geopolitics. the I out I $XXX in kind even there, questions.

types Obviously, So see in you How just adhesive the a how can go think past. the -- you to side scenario, would expect a margin in of I we unprecedented see we through the you to would it's margin in [Indiscernible]? perform? that steel have of expect what bit consumer haven't levels that demand you business expect, start from to relatively that start would where on come kind demand, come we'd off would

Steve Bramlage

the in did business. XX:XX oil the John, crude again, gasoline price I'll like try to perspective, I put

peak it's so when So And hit back a when $XXX. in dollars, and in $XXX barrel. and is at dollars, $X.XX XXXX, -- today's actually crude about that oil we those gasoline

peak more in expensive, at I a historic operate, we survive. your nearly we this getting or costs the towards smaller if crude not, again, this answer regardless whether -- more expensive for not importantly, on $XXX changing, to still is, and continue perspective up, or or from still going is think industry margin the but at not oils persist $XXX, to and from operators have it's $XXX business to isn't that's underlying of a I $XXX, So, the situation question structural

to we're that of closer even sort we think retail actually going expanded dynamic so for demand demand destruction, that to in margin take $X believe we any And is going are to start maybe until and And destruction, see time the before any until some like those change. retail not prices before, costs. there. a to I support we we to said I where going meaningful compensate not prices get over have then see fuel point gallon that get impact to And to I meaningful vis-à-vis

John Royall

XX:XX Understood. Thanks very much.

Steve Bramlage

XX:XX Thank you.

Operator

questions. Darren XX:XX Rebelez Thank back I’d showing closing to to the currently turn further for remarks. over you. like no I’m call

Darren Rebelez

again All for to I'd for today right, XX:XX our quarter. thank their once time members like join call. thank on you. team also And this the taking us efforts to the thanks

a out so to we've we great note. on ’XX a and fiscal high year So far look had close

demonstrate ability continue and plan Thank global will a normal year results strategic in everyone long-term both we our outlook on we a fiscal I'm Fortunately, drive confident, have long-term pandemic. our shareholder deliver during and times And to morning. value. great and you

Operator

today's concludes for This call. participating. Thank conference you XX:XX

You may disconnect. now

Casey's General Stores (CASY) 9 Mar 222022 Q3 Earnings call transcript