CASY - Earnings call transcript Q4 2022 | Casey's General Stores, Inc.

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Operator

Good day and thank you for standing by. Welcome to the Q4 fiscal year 2022 Casey’s General Stores 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. To ask a question during the session, you will need to press star, one on your telephone. one a to yourself limit question follow-up. and Please

Bruntz. assistance, star, hand zero. you Mr. conference require would press further any Chad today, speaker to If I please now to your go Please ahead. over the like

Chad Bruntz

With for us under Bruntz, thank our today results Chief Relations Senior me and year Analyst, joining quarter the XXXX. XX, in discuss ended the Investor Officer. Good morning Steve April Rebelez, for Brian I Darren to is President and Officer, fiscal you Executive weather. Johnson, Bramlage, for who fourth Financial am Chief are filling Chad and and

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

Darren Rebelez

for thanking to our results year. everyone. a and moment, like our and their to by fiscal Chad Thanks efforts looking good I’m fantastic forward to Casey’s contribution I’d tireless XX,XXX morning sharing start but in members a team

At year for Casey’s, not life a and is their job and our perform times every through at to an team members high be nimble the difficult challenging Our and especially delivered have efforts. have circumstances is and team’s without record I proud grateful guests better communities to for, day. of would and purpose we our certainly another under level done ability something navigating am outstanding these make

heart. a We a Midwestern for responsibility operator, fiscal we a play take in. privilege and rural to operate towns a the It we here is truly role As good. been the in in We Throughout significant we local we schools for year, for their and raised organizations million X and for to million enabled grant helping help million families. raised veterans $X Cash Classrooms need. in we over funds through $X neighbors our program, meals our have

back we for want are our us. that We those communities here communities to support and to guests and give

through year of an impacting items more we the the gross Inside store fuel favorites. we trend the finishing stores. Casey’s $XXX million kitchens the income our X% flat increased $X.XX versus impressive and year sheet. record large this to as cost prices increase the the $X.XX year. each of increase part Free results guests past fiscal per We the flow in given $XXX the profit million, year for significant the was at our and that new improved. slices and up other we to share, also acquisitions profit among Tennessee fiscal and and Inside remained the was the presence pressures the were continued Pilot Knoxville, a that for the fuel to in let’s and markets and $XXX business immediate prior generated sales the acquired distribution breakfast of a acquisitions year. recently buy fuel record in Bucky’s as were These XXX menu, units a from respectively. Oklahoma proving our can year, Circle prior gallon opened have the the and discuss an into three XX% EPS, ’XX fiscal Fiscal the the the strengthened compared to industry. demand impressive year into Total the third from in in the The in markets acquisition gross Now Through acquired over expansion existing ’XX, prior company pizza profit and seamlessly from our grow grew as an May gross a increased Illinois in rising fit these gross Joplin, outcome refreshed despite EBITDA, our a diluted scale Nebraska course sold XXXX City million add merchandising acquisitions, with cash returned XX%, K XX% we in strategic network of southwest net preserving Inside footprint. portion while addition closed acquisitions of with to our year. per of year. margin margins consumer than fuel averaging balance prior our profit XX% continue profit a also Missouri expect CD gallons gross

exceeded become has all this about X our realized run members and this poised than and guest strong to leverage synergies excited We are million guests Rewards experience. of three part made to grow recently and platform approximately to continues effectively million communicate on in acquisitions $XX the ever. with We are progress a strategic Bucky’s rate significant more our acquisition the integrating Casey’s we’ve year.

Our outlook years. over over quarter call discuss year and to fourth our and to X% for general items the goal our ’XX. private at fiscal to turn over I’d and currently next like confident now XXX the and merchandise Steve? long Steve of our the We the brand in quarter ability several are term XX% exited program the next penetration offer of achieve category. X% penetration grocery to

Steve Bramlage

Thank you Darren and good morning.

and entire quarter both would been to dedication. financial acknowledge the total fourth hard for results fully like first Before consolidating growth to take year. have the the fiscal are that given the where also strong The a easy wouldn’t it’s acquisitions the work excellent the significant unit the from the our this the in see team the quarter. we minute in year, I one results The impact along was without I closed their the strong with jump into results on to execution quarter the of performance three record-breaking and all possible mothership of and financials, we

examples million revenue $X.X few approximately sold Here fuel $XXX or are over XX%; magnitude: XX the or total XX%; sales by the for which or inside total billion quarter rose contextualize the revenue billion, is from gallons just rose year. an of gallons increase $X.X help to XX% million almost total prior was a

addition gross as of this retail This in total in million XX%. in or increase higher inside to prices sales, Total $XX contributed rise increase and the rose Now the gallons to profit exceeded XX%, well. sold share for operating per as Diluted a $XX which the were total and expenses result year. million or was prior EBITDA earnings fourth from $X.XX, or XX%. the of quarter XX% million rose $XX fuel up

highlight new same significant for up units the the healthy overall it’s on while a store store sales quarter. fleet our increased guest gallons were improve. X.X% strong traffic were to Same continued important of this as fuel performance fuel to and both existing our While inside X.X%. sales results, Inside sales influence had

million due accounts, primarily it year of prior the very It retail quarter. was and update. was versus the points basis wholesale XX increases. that most at decreased anticipated but end average penny quite of through fuel gallon level about costs sales $X be an billion XX.X% terms a Total volatile and year proved rose in finished fuel inside or we to expected The offset quite margin partially our inflation, level the inside April quarter profitability by strong recent XX.X%. dollars, of of margin to Our time cost below by ultimately the we the several all had a from reach price prior to our business a didn’t that with

stores up $XXX grocery package X.X% total Alcohol million, a per increases remains margins general XXX committed of to in were to over inflation sales these $XXX the hot the menu year staying Sales a company’s to We experienced offset ’XX rose XX over which margin. prepared re-launch to at and part sandwiches another down favorable that alcoholic was up and the increased store. and of is dispensed adverse from higher $XX while beverage quarter. to as million of gross basis. points food meaningfully single-serve were over ago. smaller is in basis digits XXX center kept and is average sales increase further X.X% high The quarter, in took Cheese inside began from XX.X%. and merchandising and total increases store continue in cheese increases, pound general stacked slices term For prior store in quarter mix beverages up to higher up in and of costs demand. quarter, two-year continues increases. which ingredients levels basis. million food XX% quarter Non-alcoholic merchandise middle up with to our which adversely in Pizza as an impacted stacked period the the these were by along price up series an cost margin an maintaining on impact in profit than shift for on increase to $X.XX. the ahead breakfast we warmers were store XX% offset dispensed partially merchandise breakfast XX.X%, round for stores. uptick as well, of team was basis start up same increase same a sales sales our profit The a historical the our grocery total job was Same $X.X of prepared Same average particularly single about non-alcoholic the of fiscal team basis to for the the XX.X%, $X.XX year million September. close excellent two-year strong by to sizes cost the ago. categories XX.X%, been a the on points margin outperformed. XX% up an price The an XX% and do Margin higher by were at up and menu and $XX beverage or perform sales food by of the of long keep the quarter, of were points full and million, waste a the the with were items beverages, The of grab-and-go further has

fuel year period costs with gallon million quarter, last up $X.XXX compared extremely gallons were During sold rose last fourth quickly fuel up a per XX% fuel increase environment year. an same preserving ago. fuel remarkable well $XXX margin margins gallon, XXX as to in in the did in a job approximately in gallons, responding fourth team gallon. challenging average X.X% and gallons $X.XXX up of causing gallon, increase while were weeks gallon Wholesale XX% sold the a quarter, Retail a total the store a few $X.XX retail of a balancing the to growth. our quarter, per strong especially fuel same million average sales $X.XX driven period and during margin $X.XX yet the as by compared gallons retail this the per price to was That maintaining a

fuel higher expense million, reported were and included up fees Energy Total million XX.X% of card the stores operating our vast up As of Buchanan XXX fourth due employee quarter. to $XXX expectations. X% and this for increase other prices. quarter of operated results a X% business more the to of is which fees the credit credit this saw or to the increase the include fuel is high in consistent Approximately Total in increase we than operating unit is responsible the million is year. do prior the the $XX $XX from reminder, wholesale was XX% the which operating increase not to is excluding majority card that expenses X% Approximately revenue category expenses expense due were store with line growth as same item. we in due

financing As Energy have the million, the fees an fund fourth the to the increase. represents was tax in compared center up an increase the at liabilities previously credit year. quarter a was in $X our of within for Circle acquisitions enacted fourth with by a Depreciation driven the and as one-time acquisitions primarily on accretive driven income associated the year capitalized was adjusting by term prior in state million, million $XX.X the as as XX.X% prepayments. during in from Pilot loan the in tax expense Buchanan well Net XX% $XX distribution quarter the $XX.X tax quarter along versus approximately the XX.X% fiscal of growth The aside, million This XX.X% the effective acceleration was of lower a XX%. for the approximately we million compared the increase we quarter. deferred of rate prior in was additional taken debt ’XX. write-off interest incurred start year. to non-cash The benefit to costs year, the for with record the to Energy, was quarter expected. high quarter $XXX.X placed of K were all Net for card and new the service store income EBITDA rates in a were company. footprint EBITDA Buchanan the to as was $XX.X prior due the million that The quarter that Pilot up to additional fiscal in company’s

have Our to balance we were cash sheet ample remains million April due able million. liquidity of strong. debt variable rate also to At flow. $XXX in strong $XXX We XX, prepay

significant furthermore XX% Our due well quite no in total our current floating portfolio, the we have insulates of rate is exposure us about currently rate and environment, rising XXXX. fiscal maturities which until coming

us. of to has to decreased ratio present plenty as to leverage they themselves capacity sheet our good Our X.X balance make strategic investments and times

by constrained At $XXX generated challenges. quarter of directors of in share, been less $X.XX of PP&E equipment purchases board spending million marking in increase supply per $XX the voted in to meeting, property and cash activities million June cash XXrd levels of were consecutive that quarter, dividend net flow. the the resulted by operating year the chain the the the increased. million free has For $XXX dividend to

and our in in balanced capital accretive allocation that primarily many opportunities continue leaning will remain front to ROIC forward, We the of into are EBITDA us. going investment

leverage fiscal therefore EBITDA to our discretionary not during this anticipate further of reach at ’XX repayments debt and expect We we two times ratio naturally time. target debt do to

our opportunistic share $XXX authorization. remain million repurchase related to will We

of other that to X% expenses the company behavior, be to fuels flat expected sales margin to potential have impact consumer with all-time Although uncertainty be Total may the gallons inside are up providing XX%. year the outlook. high growth. macroeconomic up store sold conditions on be of fuel will based operating same increase low X% costs mid to store acquisition of inside prices, fuel FYXX. first an fiscal between half are is to half in will store and to current given the Same unit once to the XXXX X% up second from approximately and Casey’s X%. XX% following is that fall in activity and of should the be related the and teens the current approximately remains, expects the expected same quarter digits opex on Total we cycle back single through increase half

Interest will units fiscal $XXX We million. depreciation and is expect new to XXXX. expected be XX to in amortization roughly add approximately approximately million be $XX expense while

approximately one-time PP&E, We recently $XXX million in to million remodeling and includes largely $XXX kitchens. expect acquired to the to million in that stores, put $XXX purchase for to investments related

We XX% XX%. between rate expect a and tax

expect activities on run million We our fiscal complete a in to million recent from with permitting acquisitions current synergies based second ’XX of rate the as in timelines. $XX also realize we $XX bias half to remodeling the more

We $XXX also free flow million. at expect least of cash

cost in the this not a months, fuel the Given that guiding seen past to few unprecedented we’ve volatility figure point. at CPG we’re

For this X%. growth fuel the CPG at least guidance model X% EBITDA in annual midpoint the for year however, would purposes at of only, lead of to calibration to the profitability mid-XXs

the Cheese Our on are to I’ll prior Darren. over at as below costs approximately is annual the the midpoint and call elevated quarter prior XX% a our store that, experience than CPG back store With levels. of running growth year. higher range, and year in to currently Same basis the gallon first same low follows. year-over-year is expectations. remain annual inside slightly is are the turn at end date of volumes

Darren Rebelez

team you on execute in us of entire our the dedication record thank congratulations delivering say again and another Casey’s year. Casey’s to ability strategic to team The our Steve. work confidence three-year Thanks to plan. gives like and I’d for hard to the

As well we’re see, to in commitment environment. strategic technology. especially deliver business you value macroeconomic has well and plan, being Casey’s has to our enhanced future shown through our performed resiliency challenging with to can exceptionally our shareholders a positioned which tremendous is our

are: strategic are three reminder, a investing growing As via the capacity growth. by our the three where be team. plan reinvent disciplined guest our is in talented and experience, pillars and the of store All pillars guest efficiencies, create supported through

data We’re digital our the leveraging team us to position as reinvent well we respected will on technology future experience. than journey. modernization ever embark We’ve before and that built Casey’s more a now guest for the tech,

on centered areas: engagement and goal improving three best-in-class. is experience, chain, via technology and engagement capabilities. focus fuel primary Our our guest guest team experience that is around a to is merchandising member growth driving supporting and supply impact, create and The

app all beer XX% mobile with whole hard that Our now XXX is of by pizza and driven which now can orders. represents recently revenue, stores We currently deliver seltzers added digital their pies. along

ordering with more along chain. our in also XXX-plus technology to a priority, guests. management, spend members improving accuracy We functions create our carwash plan our data inventory stores enable Merchandise ease We within stores efficiency, between efficiencies our with on will rolled our carwashes. for manual robust highest program time and our stores analytics supply to out along and utilize subscription and team to our more our communication

efficient near Regarding supply term self the challenging has times pillar, for us the creating well to served chain capacities is inflationary help environments. and and our navigate poised through through us trying distribution these efficiencies model

fuel teams tremendously and volatility role and two through to growing fiscal look procurement play of years EBITDA ’XX. well the navigated we will to have a Our fuel critical continue unprecedented in pricing as last

as store their are and the Obviously with store full acquired the We ’XX. where in guest team fiscal be Finally, our newly doubled was growth, hitting XXX previous via as new well is central on disciplined high recently growth pillar, more our procurement department stores. display stride. than unit protection record our growth asset created constructed

shareholders Our year. of acquisitions give organic two-pronged of can the available we business peace business to alongside that ratably should strategic approach are after taking mind growing growth year by grow the they our advantage when

construction. is chain. is team sourcing a the perspectives or critical our diversity whether a and meantime, M&A leadership pursuing dedicated sites owner Our fresh be it XXX-store our strategy; have actively background amount stores, regional real to In ethnicity not our the team people, still of develop how about respect legacy enables store or estate the team leadership non-strategic of a right filled Casey’s disciplined. issues, strategy more with single for to and to term people, impact Casey’s out new in do the chase we through The reflects and to We This growth our store targets. remain values. fact, diverse overpay team With made or hit acquisitions need positive of team our gender. on has in we reflect experience support XX% think leadership our to drive long

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look Our annual second proxy and from with our feedback forward expect last statement. shareholders year, to ESG also our as first as metrics in year. particularly completion quantifiable We July our report after our to more first-ever should can report progress well report annual issued the shareholders our Shareholders from ESG assessment. of respect materiality with be received last to positive

confident the will traffic face People ahead drive model work we beyond, that Casey’s to to uncertain look stores. returning are increased and in I times. and ’XX of As continue in still remain to our business fiscal foot to

guests. during In two a we program those of to last addition, the do we loyalty nor periods like back you company if value XXXX, platform have times, proposition private recessionary and meaningful very the a look promotions to Rewards of now, have did effectively performed we to like XXXX Casey’s well our our did communicate not and brand

our tend needs very indulgence a you will I when as times, in food, is looking basic competitive are our excited Also, the fuel. XXXX. leadership to team We’ll take habits beverages is up questions. to give to relatively cut fiscal your to low and offer of favor assure going now a costs. thing that capability shift take that products These significant on buying last such can Casey’s. is inflationary a consumer cost and toward are people During advantage improvements considered two

Operator

of [Operator from will Wells instructions] Bonadio come Fargo. Our Anthony first question

line Your is open.

Anthony Bonadio

morning. Thanks good Hey, guys.

starters, wanted ask bit I the For a about just to guidance.

the running guess bit said something piece your are guide, going costs guidance labor think so it to I about higher XX% and of quite gives like opex thinking then at looks I you what confidence that, than you quarter-to-date. figure? guys that that Looking a - how beyond like much, you that’s are the decelerate

Steve Bramlage

start just Yes the in, obviously. Anthony, maybe I’ll on cadence and Darren can chime

I play in is in think includes that, our primary into over half quarter lapping and the place puts that the in XXXX, more on the of of that from labor the from we next where influence to that out really be we’re will may month just until the the close structures new and of of acquisitions, May quarters the in on a still inflation the the variety business, course little middle so a units K we we the year, referral-retention opex the of the drives units Pilot kind have face the acquisition up incremental bonus lap. type we still least way the bit will so four what of increase the a year, year in fiscal bit prior of put a we will year, so acquisition lap so until lap first so later mothership in we Buchanan our we pressure year, case to quite it. didn’t those most of as didn’t close two prior and pick that’s as and the end Then we Circle of be middle quarter at of of what then last started first lapped May, in field, the opex,

sits do to referencing is that relates inflation. operating the cost Cheese clear, it - is to prepared the the Darren, be cost profit As broadly? I just on line comment to in in our cheese XX%, expense the relevant for we’re that seeing labor market not was gross to just want number. XX% you the would us, be operating and what our so not in expense business, food to

Darren Rebelez

side, We to that over still I Yes, year. we to some we what labor increases starting inflation has are somewhat lap bit wages, moderated the from but were on but significant from normalize. think have have things still from experiencing, prior a

point into retail fuel we’ve in card thing and hard the the predict I an annualized into a impact credit some can of still this fees, on fees fuel--high wildcard may for credit that in feel on continuing that in opex so every to terms $X price are that for to are the top $X.XX as of basis, and factored is that where card soar add would point the in other at credit The be, price year. of that guide high so high fuel prices is of what to that decline, record and territory, it’s about impact in we’ll this and to context, that fees million incremental increase, equates bit a when at card to start put retail

Anthony Bonadio

you’re data in guys strong color. trailed helpful any for like continued in significant touch it pretty about really just May you thinking industry know seeing I you like the it off how I end, It better be that’s to from wanted showed QX but path Clearly it, margins. on us can fuel quarter the declines. to color date, on here? you bit also and sounds guys. to seems a are give Got just than something that

Darren Rebelez

acronym wanted complex would is about environment military, call an how margin for looking. we extremely an and about a to this a thought ambiguous. VUCA I’ve talk which was the and environment, how is volatile in right I This that’s fuel when Yes, lot now, volatile, I uncertain, and

those what we’re describe think now. fuel words of I in right experiencing all

of we $X.XX costs we’d an about through quarter. seen As mentioned, in increase the

beginning If extreme. in declined the so cost a increase, $X.XX increase, you is couple gallon, a over the to that path year $X.XX the on but were fiscal of where about it’s now, volatility the costs had $X.XX shift periods pretty from to to that we’ve

adept I’d time the think what and that we building through building a our to is in drivers that. do couple their We’re themselves our working feel years in tell fuel it. we be lot spent capabilities, ability to through they’ve managing We’ve had through that, of COVID, up so volatility to to at last ability different manage pricing we proven team over and I and feel confident and overcome have but confident volatility, now certainly of the

business being time dramatically how gave But we’d some with big be the always we margin other guidance by through we able pretty missed through plays in about to of so we neatly it, going update wildcard or the able in overall, that any of manage to it’s as but it, course here. will the so. that couple quarter penny up a over weeks draw navigate line a or it said, be that’s end over and be saw that timeline Now well fourth that, the we’ll and will quarter it changed after we really just not and it navigate think to, out to think the artificial will quarter, we you over I to quarter year, so

Steve Bramlage

CPG the important of it’s add place. Anthony. that dynamics may to in the historically I do Yes, levels for I industry to underpin think remain structural reiterate the that, high

costs operating fees, those higher credit perspective, and by higher moves the all I the compliance think CPG about opex from discussion those driven whether around for higher for issues they penny we we two business a as costs the so of exist in more the still labor fact industry different of None of card any near-term operators, and and acute or that just from the the and that exist small here a a perspective talked industry, today is changing, an see of profitability. though those players. of for level are we and for really what to platform even fuel industry sit don’t the are the larger has all change reasons than

Anthony Bonadio

helpful, Got it, and good luck. that’s Thanks really guys.

Darren Rebelez

you. Thank

Operator

comes Bienvenu next Ben Stephens. Our question of from

line Your open. is

Ben Bienvenu

good Hey thanks, guys. morning

Darren Rebelez

Ben. Morning

Ben Bienvenu

about ask to want in-store the I merchandise margins.

margin talk but then compression peers would done foods, buy be margin think grocery, margins, there’s seeing. pressures That we price you any or if notable you’ve think in would volatility XX% and me the which I’m all pointed expansion helpful. grocery and correct food business wrong, and forward You cost prepared to if if think would your mitigate you that anything, reside maybe prepared the and cost the please in cheese what, and I is I between are given to there. about could When

Darren Rebelez

Yes I’ll is blanks. Darren. start in this can Ben, fill ahead the kind go and of Steve and

so major The solid with year to I we bit grocery price of January margin, we be increases we’ve the think have try in that stay on a those general is calendar that took still or X and grocery increases inflation, in of a are think the before, had GM and basis, manufacturers with mitigate spite maintain with be certainly cost respect to we’ve able we pretty XX% so and the stay merch have to we the throughout to more the planned intent you’ve discussed agreements apace the we’re ledger. CPG year little margin side and going range. those, and side that because, those margin to expansion in retail some as inflation of ahead and to manageable seen, as in

On what tends the really matter most in a meaning and ahead so that far nobody more able a it. have be bit commodity recently we a more we’ve it them year, is and price last there It more increases price keep think October we the last foods, little of of les taken little be believe power to of will but based, have being we pricing one retail, of three there. ratable, couple retail for prepared weeks, of a to so because sandwich, be so proper we breakfast it’s of for pizza should pricing power a at slice little commoditized the or a less knows since

we’re Steve, here other continue we sit we that, any of how we’ll we to prices As then just that? today, to it. the color caught wanted see you add through commodity to and manage pricing to up to impact believe to piece need have

Steve Bramlage

bought able reasonable of to a On cheese last sense, really have space. three to obviously, difficult has day. for were but forward makes forward in the quarters. history, price that to The little any we in not buying been that hawk fourth market. months makes have a at find single wish the watch it The fiscal of every six proven a pricing it be company sense the where we of us. like we’ve We very so forward big bit had and I cheese a player we in specifically, secure first bought quarter the really cheese in anything a forward ’XX, forward don’t

take reasonable of minimis into Hopefully can that we in a obviously of ’XX, locked as here sit de Going if today. changes, on that and will we we advantage it’s do it pricing fiscal terms. level

Ben Bienvenu

pricing great. price think be the X% your to store year. XXXX, When sense. That of of you that we taken. alluded same in some helpful Okay, this growth would sales if that, you perfect versus next as Darren, about the X% composition disaggregate in increases growth in-store to you’ve we think about could volume makes

Darren Rebelez

probably look way to Ben, if so expect quarter, fourth store over equated from to X% we of at about a and was little X.X% Yes, from price half a what increase about I took same that. we sales percent the a which equation velocity, increase, it I the guess at the would similar an unit I’d saw is was look is

of it know, You right lot consumer different with is. way now a dynamics going we on inflation the have

buying the say but on single I’d we that items, home that our sized trip. buying so and things sales out. seeing accrue continue the so of It more per side, trips frequent helps more consumers frequency, with side out serve are on people take us think margin to tends help less and packages making benefit We’re which are to will to less

of up, increases inflation but flat so traffic. that Now, average and higher average slightly the price retail mostly have still price be retail, to is it’s and kind by driven to going mitigated think we

Ben Bienvenu

Okay, best great. luck. you and of Thank

Darren Rebelez

Thanks.

Operator

RBC from of comes Our next Irene question Capital. Nattel

Your line is open.

Irene Nattel

everyone. good Thanks, morning

respect clarification lat one package the as in as question. point With the to to to on tobacco beverage? of trade-down your well answer Just size, apply does that

Darren Rebelez

does Yes Irene, actually. it

and if of things bit of on less COVID, to last that going side, back XX% on that quarters, fewer to we’ve little you pack spent That’s about Over trips mix, to is as recall cartons. on to get we carton the to seen the single are and during the which XX% side heavier packs reversed, start normal all packs a almost people swung levels, that closer back mix cartons stores. and pre-COVID really couple about

Irene Nattel

Is reasonable what essentially being a seeing is we’ve helpful, what comment? really that had consumer when That’s seen so previously spending pinched. you’ve you’re

Darren Rebelez

don’t think as just When a per behavior I little people that we’re less just they doesn’t as do. to, so That cash begin. much Yes, normally so. is stop, mean of seeing occasion tight, used they bit buy fill pantry really they than some they

Irene Nattel

Thanks, as result you longer initiatives Is it all that sustainable? that’s should question use with really on around back was the helpful. way challenge of come basis, infer then that into mid-XX margins. forecasting your but a growth. by which could those, be that, really the wanted about get all X% from think a in to to I we phrased recognize you’ve of range, place, the we mid-XX the gas Clearly I a that to or term if also comment range we safe, intrigued put X%, you you

Darren Rebelez

going is - stay I soon. now time Well look regulatory of one and be margins know, Steve in do I before. see at high everything the cost the and when you don’t to that’s margins potentially of and labor, continue and in those to increase compliance, else retreating fuel business going the ball cost world. high on true to to is this of a any What industry referred is what difficult It’s the operating Irene, referred--you say. crystal about I’ve I’ve talked a to earlier a underlying costs believe

per with wildcard of higher those there margins fuel, with credit prices, to fees to is a in I card there maybe to that short really so prices for on term a go cents gallon, price net-net that’s of the would may they credit as the expand end up anticipate that, in come back compensate bit fuel and offset a inflated a because bit bit Now, overcome a could we retail those But can I think little retail and the bit the a so card associated tend up look see to then these fees. higher down in little it place. high same you

Irene Nattel

That’s helpful. very

volume question if guidance, take Just we the plus-X%-- on that one final gas flat to

Operator

Herzog Bonnie question comes Sachs. Our from Goldman with next

line is Your open.

Bonnie Herzog

the is of guidance to believe, still next XX%? and year X% to how a XX%. ask little that noted you X% Is what how margins, given the out X% high you growth, as context X% I the I’m just fiscal your to wanted Darren, your CPG just opex opex EBITDA assumed, year about implies understand margins. at you everyone. wanted guess bit that Oh mid-XX you I that of single this that lower, or growth something a differently of are EBITDA so to X% target hi, just risk hello target kind or of back guys go on digit term medium target fuel and I thinking terms for of see also to but this in I this EBITDA in and doable, laid asking growth growth, growth

Darren Rebelez

on three-year CAGR. giving of help still we where from that feel of over just XX%, on the a today X% right plan, that was the the Look, range XX for to out keep confident put in so you investor favorably I CAGR makes now lot math and here XX CAGR land our a so XX, a very sit we’re very or the opex about volatile, it XX, Bonnie, three-year now a as was can talk taken on so period, do Steve, X% in that. land going and approach the that terms in think so the we’ve right first of we cycling work environment to - ability will honest it, we’re of that little. Yes then it think, guidance there’s Steve, over, an and a us can to day XX% a our think an think over to X X three-year this will we top of the two me we’ll top XX%, the we I commitments XX% over that to and somewhere years - on in we

Steve Bramlage

doing confident about modeling to that. a folks. holds. remind are - growing EBITDA, the algorithm all term, exercise next for not feel would guidance that. Darren’s at valid calibrate do opex our slightly than just good clip It’s medium We a feel just giving and our we ability very I’d about you, EBITDA grow we’re we includes That points year. very algorithm to XXX% over lower

Some of that new from is will from going come that same to units. come of some store,

bit is pressure to relates because units it acquired non medium but you associated for lapping little a so new get environment, fiscal unchanged sit, where it’s term it sure. and happens store ’XX, As obviously extra algorithm our unit a in I card credit with high same we’re of still fiscal confidence from just ’XX, from that, that super

Bonnie Herzog

level laid Do that where what’s gallon, up we ask of guidance and Okay, you prices Where could go a above head could at? do may a the your to would understand you implied have that’s you occur see and the I’m going? helpful. thinking what $X be quite bit. or you. that asking will assumed they I prices hit about a wanted go when trying which you at guess then Thank on think hear think to do this to to continue about out. demand you true because based pump, destruction, I prices expectation guys Curious year,

Steve Bramlage

to Yes those geography Bonnie, say peak we’re where going it’s out. really it’s very hard prices specific. to would predict ultimately see I

that slightly areas the We least over $X suburbs, $X areas and greater we Bucky’s at from range so some north a a just well retail we where geography referenced, acquired have to but a just look prices range. Chicago expensive range most stores, of wide approaching it’s you if the the the you that expensive, take end have and that other our so some are $X of pretty wide those are at gallon, pretty a the spectrum in to were

point. our quartile is demand of retail out look based at north modeled well we’ve we quartiles this of this terms on our destruction, prices, at of which a on of top In $X so kind prices, gallon retail

at some bottom so like starting still kind single flattish are gallon see two erosion X% sure a we’re how we at everybody, again, uncharted have growth, to not slightly a demand there down, in out. we’re quartile together, volume low expect that quartiles, to In maybe is in what the to you for seeing solid in number that, all feel see But and Six of dollars is destruction I’m we’ll plays I this guidance. for to is so gallon point. middle the to would water flat We some but throw the imagine that then digits. that

Operator

question next Research. comes Cerankosky Our Northcoast from of Chuck

open. is line Your

Chuck Cerankosky

with trimming foods, Good gas buy, what and for morning pizza available? with or everyone, great then maybe comment pizza being they is stopping about customer in giving they’re who’s quarter. the Talk or and items so maybe in and you the up how purchases beverages, reflected that before pumping your are please, other if the other prepared can, how much? down going up they slices that Are

Darren Rebelez

into people Yes X% products well Chuck, at is resonated coming have see started of buying the seen any in some so or What around what our store, quarter we we people frequency and store. have to the we are haven’t reduction brand private the the certainly penetration. trading within exited

purchasing which we’ve to versus side increased we people shift pulling down the and inside but stuff. just where in change that time to us People little store fuel private buying terms to visit, time, we’re is less what to at shift What a today, fill-up on get their fuel, than they the XX affordable more The month better buying bit the seen they’ll gallon things people we up options, more here believe having gives haven’t opportunity fuel per about visits that just over initially the of behavior. basis a historically make last sit a with is so fuel changing brand this we points is behavior. few we a more back just had average they in As towards store in X.X%, on end about so so there. aren’t behavior buy a are doing are have year, same was it seen

EXX. shifting fuel out they’ll the starting blended from is over those is economics in because of behaviors see about save from so product they’re thing we’ve second thing to some see at type money to that a down consumer what into ethanol working Then to actually premium but now over EXX, doing are of an a most right on trade shift blends regular last you’ll XXX of right are now. versus favorably mix is fuel ethanol customers basis some pretty of seen to we’re the so higher overall The shift perspective, way, the the point EXX

Chuck Cerankosky

purchases going latter was When ask occurs, sales hurts that the that your increased richer correct? I your to but ethanol mix. of about fuel a margins, mix helps margin,

Darren Rebelez

Yes, that’s correct.

Chuck Cerankosky

luck All for right, year. the thank you. new Good

Darren Rebelez

Thanks Chuck.

Operator

Our of James. comes Raymond next from Bobby Griffin question

Your line is open.

Bobby Griffin

everybody, Good questions. morning thanks my taking for

that predicting outperform, into from fuel where asked there’s midwest. the forward? apologize, comment you is been actual on practice? know curious, we it on but a We little goal, to you one we’ve for Is guys but average the it, structural - should and that understanding we on I lot about? the you in to your Is margin’s a or inflection harder, guys can pre-pandemic a have bit outperformed can about changes I the investors a guys a hold Casey’s lot continue or is have First pandemic, the OPIS keep you as nice outperformance point outperformance that something lot of that just can fair a the talk going analysts, based fuel made to think about

Darren Rebelez

I success to every we we Bobby. that that we the is compete and one in good made we’ve our last outperform don’t significant changing. over sure category I investment of expect see have years. would in, and some that competitors on say Yes, couple those certainly fuel had

execute talented environment. really in that can I proven can--that has that capabilities any strong very and team they up stood some a think we’ve very,

and environments of team to I expect see really more start the that we geography. our would these yes, volatile outperform where think so would competitors that shine, are I you certainly our in talents

Bobby Griffin

as was rural-based farther kind Darren, probably you but you that for question you store from a and quartile gas is they’re and grocery away are my trips I trip your higher seeing interesting, in the a to markets? stores, can--you shopping given prices in prices as know you on going higher whatnot match they frequently Okay, your the to is directly small data further to go or don’t if and the have standpoint, location larger given up grocery those Wal-Mart quartile of know, then very that stores more customer, go with so it’s to more much that see

Darren Rebelez

I me data I that. Bobby, me have higher. certainly expect any tell prices would of don’t would retail front get in as that that

referring Illinois, to we have data us haven’t seen right those rural to. In in dynamic particularly I I the Chicago don’t of get outside we’re the in now. prices, think in like where you Illinois, probably we’ve suburbs. said, you’re to extreme we’d have really seeing We back more prices retail that That’s the seen extreme are areas, of front on not the like so point. that

Operator

Company. next Sidoti Our Anthony from question comes Lebiedzinski of &

is line Your open.

Anthony Lebiedzinski

Yes, a good to bit just you morning, little wanted thank the and switch questions. I taking here. for gears

the exiting doing penetration. and with X% You talked well label year about private

on look forward portfolio? are the categories you you look here, private which as you label mostly expand As to product focusing

Darren Rebelez

actually it we’ve become different standard in that some different working of provide. really we’re those in some Reese’s, dollars, think the those right and more launched which are far line in of the illustrates brands, Anthony, in bars mean a so are we the I tell one bar private on outperforming When before, lot quarter, those national brands, have I in quality know, I XX we say the something units, candy those and of is that, and so Casey’s You Snickers, margins they categories but can participate of a last all within you where category. success and private We now of never brand. penetrated, some seen the products categories of and have played value number I size underpenetrated, that’s

in we’re sound play I’d the brands, categories, in category I out when expand order think items for challenging we brands, significant goal as point at tailwind that success with this category year, had an our gets about, to of in today bit term environment, another the getting I’d as within on time the we in general doesn’t that grocery some penetration and tell fact category, pretty XX look math that XX% the in us XX that have private are little we’ve this already and over thing and other there. that very a it the we we a category, on you but those more big The think perspective. this of to is private having longer merch plays in that’s we grocery and out you a is those quarter, as becomes merch you products. so tobacco so XX that launched increases tobacco factor XX general new by equation a cost fourth We like inflationary on role quarter, good bullish penetration in coming But that on per the we’re categories XX% items so when mix you make take of really tobacco and category, four now continue

Anthony Lebiedzinski

just talked before, costs commentary, what availability, us some Thanks to there? as give labor as the but seeing can going you’re for Then you as back comments about you labor to labor far that.

Darren Rebelez

a have Yes, HR teams labor operations and although of tight, managing our that. still remains job done I really good think

normal, actually where seen had or context, one I of as I’d sitting per say so at an sit team just about so the issues a any standpoint because limiting or from are staffing we’re about opening, average of stage feel below and really closing today, applications that’s would--in kind that’s haven’t We stores uptick members, and we good game. this in person we here we’ve we’re hours a store historical of where

Operator

Capital. Our next from BMO of comes question Kelly Bania

Your line is open.

Kelly Bania

but if us Thanks questions. what Wanted light shed to understand just non-comp kitchen taking for X% see outlook good the perspective Hi, obviously merchandise here. the Bania outlook. some given on growth from you your some could you remodels, still M&A on are growth X% and comps, our - sales the a total total morning, to help Kelly merchandise expecting

Steve Bramlage

the going to store morning. start It’s good Kelly, same with be higher is that. than This certainly Steve. I’ll number. Hey

lap XX-ish in the those but in we benefit If came you just you’ll them way a in so like come the new the lot think first with year, of associated of those. last those, units, a all won’t quarter get

new zero. the you from a same in remodeling that food benefit the You’re it’s not kind of in number, get we depending we we step that usually start a correct a and as that store close to we to when the day close kitchen, these stores, get the on permitting, sell more in store, a open up base prepared lot

correct be clearly think your with turns I to in sale that, and inside what total is that number associated but better disclose out the number specific merch We we’ll be. instinct don’t the haven’t quantified, run should than rate noticeably that

Kelly Bania

Also, helpful. to wanted that’s prepared ask the food. about just Okay,

the in gross talked done of in more prepared had margin in increases, price it some the to pressure that about, sounds is your comp recent like You elasticity, like thought price have March the plan the April. in offset pricing power. sounds and I line? another think, help as what increases you One, of you guidance, look response at terms the you What food

Steve Bramlage

the those the in center in beginning I calendar were know this little our based put inflation of grocery let’s across is half the will the most and year continue consistent and matter If out. a the take grocery behaved do to a put year, next year, to turn the reflected expect we I we the call to renegotiate and on price separately, get calendar nature place no increases in differently we two point. latter and think what I digits, our margins the of calendar lot so we’ve as tobacco, maintaining low enter will run through which would what Darren that price of the exercise, those negotiations categories margin mid on of then the calendar in planning year, business, January, foods, this into on business Those business bit just little with start of increases would store into single pressure in a of what’s expectations. contractual to complicated, versus as of depending so of let of terms is is. at I’ll that Steve. is have all the particular end through category food, our that were of price Prepared so of more joint chime action I how most We’ll think our don’t the most Darren’s prepared in This grocery excluding expectation. the but because we we in

sit I prepared over increase, we cheese or turn but you we’ve lap most year, know worse, extent fiscal through We dials or cost we a it’s average to will we’ll that food know, points now, either to in price once to an the rolling the do food need expect sustainable at the at year, literally that for get about course significant store of - later ultimately, covered over is it of year year, of would the of But we have more benefit inflation different the them today. entire you in the We of They’ve we year. year. digit number course and digit single single increase, pricing increases the XX%-ish in of some of confidence started that or think the have on now prepared of enough but started we the to system as the category. started the doable on rolling time here year based the know that mid of fourth calendar through last of is better example, middle on ones proteins, kind the right those continue quarter the the of price about the the the give us mid as inflation beginning for us and kind this inside dollars gets type

Darren Rebelez

a thing, only Yes, from I you an the fast have even same what and QSR the in not is only restaurant us to business, thing put elasticity Everybody retail QSR the to casual will ones some the than tend affordable volume with would expect we that’s see benefit from think that casual, prices we experiencing that is us more and Kelly, recent and inflation. I’d than we’ll taken, people that standpoint our so most casual into on that we we’re be shifting when add experiencing should a fast channel, over some you, spectrum, we’ve the fast which side. that time, commodity channel the for a from restaurant, QSR, switching, option certainly into so help

Operator

next JP Morgan. of comes Royall John question from Our

Your is line open.

John Royall

Hey my guys, good morning. for Thanks taking question.

plan On do XX if organically. program the just it store looking to guidance, it’s big you at relatively the stores, mostly addition a

at on ’XX Just program, that’s similar much comparing the and for program. backing years, the if maybe. some capex ’XX I capex XX fiscal to build there, there’s smaller so just so the before that acquisitions something and new low trying prior end store seems to low assumption missing to or I’m pretty the from if there’s stores, remodels a the XX relative an don’t that the why else of I’m square appears comes to know out

Steve Bramlage

it Yes John, yes flow well we go something, PP&E as the will that a XX cash answer would item on is the so statement. on line is this purchase of obviously, The morning, it up through assumption, mix a build that won’t we different will go through Steve. we new units good as end purchasing. If your I units be units expect

going today, directionally half. probably it’s here sit we half As to be and

half million. land bank, to of end units ’XX some know not. spend contributor fiscal have $XXX we on million hold we of to I year frankly, mainly were or chose run is think frankly, to this factor can the beauty of going kind acquired but why you’re couldn’t that and to so in and and biggest capex I first we and builds part model, so today, that’s we the opened not that digesting our we chain and so last get kind have things, wanted half, couldn’t we, just to year in the don’t as we total issues going offsetting ’XX of if - to, actually I will of supply that’s that of it’s that’s here and probably fiscal the many could rate units, the say is of one $XXX we because fiscal to get ’XX sit new spend slowed down better, at because is everything the

that we’re does things to and what of equipment that for and to things like some tell and to the as assuming going spending vehicles be of time kind want We’re store, that. up how spend it successful to on able we aspects like certain will catch but we’re on

John Royall

the taxes detail cash cash looking a just taxes to little quite looks large. little I that full Great, wanted really in on was just you talked dig your deferred which driving a deferred low the it on add-back, the more the were helpful. taxes. relatively thanks. because little bit for remarks. low like what in was That’s prepared that I’m a about on Steve, after for year, for adjusting Then

Steve Bramlage

in a think tax lower were have our to We active that announce lower liabilities in and lowered tax standpoint, fourth in income I deferred three All tax was cash that reduction. if Yes, rate the rates end in or going revalue the relative they in actually so to quarter. announced tax will we footprint future. fiscal big bit that to probably tax a state - income rate just low of driver that, the what from a I provides owing in tax so think the and it during us Nebraska we’ll the Nebraska, the tax was it an positive immediately state when at state of part they the of payment how I allow year would It’s make here That for think sheet, in will taxes they’re rates tell up why overpay impacted quarter, immediate announced will and I you and for actually little rates, tax beginning we the us. was their to of first, to have tax states receivable a the balance it there and the fiscal us item ’XX. be a have they’ve entry smaller have a we cash estimated if in benefit flow ’XX. tax deferred a have reason have a Oklahoma on future even yet, not liability, the the year Arkansas it’s

Operator

comes Our Barclays. next from question of Karen Short

is line Your open.

Karen Short

very thanks much. Hey,

to be much in you gas gave I on way to Then run background wanted margins rate in the given really haven’t for the where I respect actual you perspective the to concrete the out indication there’s benefit but five of so because think find the more for talk about should your changes margins. if inventory on of with obviously in ask margins. other seven-day get with management any if old little a to process, ground, you you your gas you trending to days-old any outlook wanted an could gas process. to where I a I slight from fall, just quarter inventory about question year, to wanted through gas into to wanted know about get how going bit little date, when are a hurt prices noise. Sorry talk that managing managing and so current terms rising gas to prices are a but if the inventory you’re thinking you’re obviously inventory

Darren Rebelez

we’ve question, year, fuel so not of for with to of that practice we’re point. at your consistent staying with I historically Karen, of part kind doing first not the that guess guidance the respect given this margin

way fuel expand short up doesn’t curve tends inventory is as have way that are then when upside, cost on more up, the ground it margins the probably retail prices terms up, the inventory down. falling that actually cost then inventory they when about it’s very too, help, management way then margin typically so but the but to opposite going lag it. way is we down do in is the true the to upside the that the on downside tend rising moving cost term to in and tend your the In prices way of higher so down, slower We’ll on ground, costs retail on then on we yes, and the in have the in the the think ground, have like fall lower when you expand do on the cost to does rise the you contract,

Karen Short

retail about and talked, you as terms terms capabilities of market, in in second in and marked guess, sure And pipelines, of any any margins, contracts inventories to thinking is Then I’m more, how next so about had leaner I managing evolution gas upstream had terms at that? update of talk is on there be day to you’re you’ll on in this is to the question about week, of? actual there I rack

Darren Rebelez

pricing to for the relevant that cost we’re about we going to of street, and that’s strategy ground, the the landscape to over Yes, how that market. on in concerned and sure want competitive the consistent we’re time. fuel with be cost and range the in are What is concerned our so retail not pricing we’ll in is manage mark make as we terms our on, the going we about the then staying manage

processes. risk got accounting further next management in systems that building terms that fuel year. the fuel procurement on out fiscal to procurement more procurement, would the all don’t effectively. launch some this so implemented side upstream this us further allow in get in expect the we upstream year, but In of that be place this those of both as We of to procurement year that side any process, sophisticated that we’re We capability year launch one intend process past actually side, the upstream to fiscal dispatching we’ve begin those have of our wrapped past in up capabilities. and so systems We as go to and just quarter, we will so we in processes year can that and sure well to this the this really that making on that execute going foundational

Operator

would the to Rebelez to I for closing remarks. Darren like now conference back turn

Darren Rebelez

Thanks us for year. once for to time taking join today. all-time All in members again another thank right, team you I’d to delivering our contributions record also much. their thank very like

be our we next you you seeing able to Thank you. those look analyst week of out for to day, will then. to For [indiscernible] forward come who

Operator

you for today’s call. Thank concludes This conference participating.

disconnect. You may now

Casey's General Stores (CASY) 8 Jun 222022 Q4 Earnings call transcript