Earnings call transcript Q1 2024

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Operator

Good day, and thank you for standing by. Welcome to the Q1 Fiscal Year 2024 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. [Operator Instructions] Please be advised that today's conference is being recorded.

like Mr. the now your over would today, speaker I to conference hand to And Johnson. Brian please Sir, ahead. go

Brian Johnson

XXXX. quarter morning, Good and July first the thank us XX, ended joining to you discuss for results for our

Business I am Brian Officer; President me Senior Officer. Vice as Chairman, well are Rebelez, Chief Bramlage, Development. Chief Relations Darren Financial President, today and With Investor Johnson, and Executive as Steve

integration statements call forward-looking expectations within for of statements Before meaning growth made opportunities, plans that by may I'll performance operations, constitute sources this during of XXXX. any and and begin, at Private to results forward-looking and related our we periods, and future or the relating certain needs, assumed supply investor strategies, the Act of future Securities statements remind us conditions, company's liquidity Reform statements or you synergies, financial Litigation the stores. include These possible business chain,

strategic filed on annual Ukraine Form on with on and the factors recent are and the and from and known to which any There as that ability future well website. most of plan, from limited our those of are other or our a results XX-K materially and in on of may execute forward-looking strategic duration report uncertainties number risks, the risks, benefits in our expressed and integration but recent quarterly implied available related impact the XX-Q as the other conflict and results our differ to not or including cause to as governmental acquisitions, by factors actual actions to Form statements, described SEC reports our plan uncertainties the unknown realize

any today otherwise. a future this statements current or call as intention forward-looking whether and statements with obligation result disclaims reflect Casey's forward-looking of information, events of our Any update or to revise to future respect or events, as made views during new

call, at be this Investor for the breakdown referenced www.caseys.com non-GAAP can financial the at detailed expense of website GAAP to as A of found well the our measures link. in quarter reconciliation increase fourth Relations under operating as the

I'd the call discuss to said, over Darren? our that to to quarter first now results. With Darren turn like

Darren Rebelez

morning, and everyone. good Brian, Thanks,

the quarter get moment. We'll first in results excellent a to

I our dedication year the start. off team thank want First, to to getting their a and for to fiscal great

annual guests As process Classrooms local shifted and schools, giving apply. into support $XXX,XXX. our parent-led projects to and schools, in members, grant The These application over raised in needs communities. generous in funds season, Cash team August. and campaign its back-to-school opens we for guests October, and our held Casey's organizations communities will our passionate and Thanks we encourage to students teachers and teachers for

results from year. from the share, sales in of inside to increase million. quarter. X% $XXX strong, Now, and prior increase The $XXX company prior let's XX%, profit driving gross from discuss remained Diluted the XX% finished $XXX EBITDA, $X.XX the at net some million income, an of year. up million increase in an per an EPS dollars Inside XX% generated over

launched we presentation, demonstrates thin for innovation blueprint addition in lineup the first This a Day Investor the a been quarter. our and in the at success pizza seen have has may great crust you Casey's. As offering to

our Guest menu. Insights identified gap a team in Our

Our culinary team created a delicious product.

plan. is and brought team our communities and, three-year to campaign partner themselves. speak And marketing and I type This our the innovation the help us results will across in great advertising that ultimately, for Our strategic teamwork with marketing stores achieve worked for a of create footprint. our to our something strategic our think life team goals operations

appropriate we business, and fuel continue On balance to volume an the strike between margin. the side of

a wholesale was to are higher However, no industry there significant stay. is influenced It quarter and events margins believe that macro perspective, margin. a were one is here cost that from performance fuel we indicator quarter's notable difference a relatively with this this strong benign

truly quarter of our are continues Casey's operating normal objectives this strength to business very both strategic achievable. think do and plan three-year I store. outside excellent more The illustrates and the the particularly the Overall, job times unique shows effectively in business a inside and team efficiently model, an the

two-year I the the same-store with Inside X.X% stack like some each We non-alcoholic average first margin of an to and on results whole and alcoholic XX.X%. of as quarter pies up well as saw in the notably and bakery, beverages. would now or go were pizza performance for categories. share our over sales XX.X% details of a strong in basis,

support find results. to profitable drive Our mix from to and product right promotional continues team, with the sales our and supplier activity partners,

whole and food our to thin prepared points in two-year commodities, or Margin XX.X%, up mentioned year. favorably drive pizza addition by as quarter. crust bakery. XX.X% stack saw in up performance margin cheese pizza an a great basis impacted were The dispensed softening with we basis, on in helped strong X.X% notably XXX beverage from with prior results was previously the Same-store average of sales pies, with during the innovation sales approximately

approximately general sales XX% the prior up average XX basis were and X.X% an merchandise with on margin of an or basis, XX.X%, stack increase year. points grocery a Same-store two-year of from

continue licenses. of strong specifically also our liquor quite fantastic results. Alcoholic energy momentum performed with our with X,XXX leverage beverages approximately in we as well beverages, competitive stores continued drink, to non-alcoholic beverages, We showing advantage

same-store fuel increased margin X.X% of with For a per $X.XXX sold gallon. fuel, gallons

balance is team gallon for margin and speak Our fuel the striking between results the and right volume themselves.

per margins last quarters per gallon. a over the $X.XX been in the have This five row quarter of fuel marks $X.XXX ninth four with gallon and above quarter

over from now financial to the the discuss to first Steve? I to would like quarter. the results Steve call turn

Steve Bramlage

Thank you, morning. and Darren, good

that's of model areas performed in execution our a three the the of and Each teams. testament of business to well business the and our quarter, our

to for quarter year lower $X.X price the $XXX a million billion, Total sales prior of prior of for or X% decrease increase year. at revenue $X.X retail from an due Total the was XX% were or from the the fuel. million the quarter billion, $XXX inside

$XXX the Prepared million X% sales of general increase approximately sales an $XXX an For million on of Results by and food to million, $XX $XX million, beverage increase to were and by a by rose X.X%. stores more dispensed impacted also operating basis. grocery X%. quarter, merchandise favorably increased year-over-year

gallons Retail by of fuel million. ago. $X.XX sales offset in to first quarter was a to were due The X.X% decrease compared average $X.XX the a the was average increase to gallon gallon down retail that price $XXX $XXX this fuel in million per partially XX% during period in year price sold a a retail

gross profit revenue driven less of or is inside of million fuel Casey's X.X% amortization. gross in million from X% by the goods profit define the decrease XX.X%, gross year $XXX by gross prior Inside profit increase a points As excluding depreciation $XX margin partially or sold, cost in had but quarter, we offset $XX.X of a This of as a year. basis an reminder, of and was from profit up million higher gross million $XX.X or profit. ago. XX.X%, XX first

further lower The the products, basis merchandise to increase than favorable and from due general in of margin charge LIFO XX points and favorable grocery label XX.X%, shift that's a increase a penetration year slight was the with year. mix was prior vendor an private funding. prior of The

costs, year. from XX.X%, up softened, pound category that The was also approximately input $X.XX cheese, a benefited commodity an basis for margin costs was per pound margin DB XXX the quarter, approximate This $X.XX beverage prior a impact. lower prior positively dispensed points from from the had our in and compares year, which by impacted decrease that's points. XXX basis XXX lower year, margin of point XX%. Margin benefited PF basis which LIFO charge and specifically per food last Prepared as

sales We $X.X in our with and quarter, impacted And adjusting associated PF one-time positively of platform. and the midst are margin these approximately by Rewards changes Casey's million. during benefits the certain DB

we concomitantly running drinks, $X.XX the change. long net were benefit fountain of campaign we because from see of program a summer not However, a much did promotional

$X.XXX the the year. Fuel million benefited gross the million for all-time quarterly RINs, gallon, per $XX.X profit quarter was in high quarter the by year's CPG. sale margin gallon $X.X up from that's Fuel $X.XXX same prior the and prior down from of per from

expense was in expense due lower $XX.X expenses total stores increases. growth first operating the prior than operating up year. unit is employee approximately or all fees $XX.X prices XX year, offset due approximately $X.X the retail increase balances. Total the up of rising prior quarter. to remaining cash the expense flat, in and year, X% card increase in that's million due quarter, reduction Credit the offset Nearly stores. Same-store the our million to same--store to was decreased hours. X.X% the operating million, on by as million more interest the more prior rates was $XX.X $X.X that were the aided essentially we primarily wage expense in operated in versus Depreciation $X fuel interest operating Net million versus quarter was by down million as rates

As debt is floating of a rate. reminder, XX% about our

income the rate a prior driven tax we in XX.X% was an reduction by state decrease XX.X% tax the recorded effective year. for rate to That quarter to The Nebraska. the compared due of in one-time was that benefit

year Net an up XX.X%. $XXX.X prior income to versus of million, was the increase

a compared an the ago, for increase $XXX.X million of EBITDA was to year million $XXX quarter X.X%.

$X.X July XXst, and condition we Furthermore, total we remains fiscal have billion. significant coming flexibility. Our liquidity we balance had maturities financial in due available excellent of XXXX. sheet until ample On no have

X.X calculated Our notes, our accordance now in times. senior with is leverage ratio,

equipment $XXX by cash prior million million million, For the compares of to quarter, the $XXX property generating and That company in million, $XX in net the cash activities year. $XXX in less resulted of free generating operating flow. generated purchases of

$X.XX the September At to voted Board the per of dividend the share. quarterly Directors at maintain meeting,

and growth share quarter, our remains stock existing regards priority. to capital $XXX we affords the with Investing the opportunity authorization. and as accretive allocation recent Day, we on have But mentioned sheet our million $XX remaining During be first in repurchased balance our at opportunistic of repurchase. ROIC million share EBITDA past Investor the in than our approximately repurchase also to more us primary opportunities

this press during to and is acquisitions is several on EG call, we cash funded pending and transaction with calendar These Group approval expected and mention close with subject have be regulatory release hand. this In to pending year. acquisitions. will will our The

stores XXX add least pending in As to of fiscal transactions, expects a Casey's the XXXX. at result

We following the entire annual outlook our second earnings quarter will revisit call.

for are cheese Same-store slightly gallons, their through of spot, Total less growth annual our that's be range will favorable versus quarter. primarily modestly August prior and and so August are to prices the sales, the the in both the experienced end quarter Fuel CPG outlooks. annual near are midpoint current in respective year, the than high-$X.XXs. the as follows: quarter of in fuel high current inside we timing. expenses results operating At but below first Our due the second was

I'd turn now back like call to the to Darren. over

Darren Rebelez

Thanks, Steve.

for strong would express strategic off to We're quarter. great like an plan. my our our to to I start fiscal Casey's gratitude year delivering three-year entire team in to another extremely the

been the our pending bringing about distribution and Our markets, further complimentary in pizza M&A our and of suburban more Tennessee. and as we're infrastructure. acquisition with our XX footprint It center's rural and and and within is estate Tennessee. real Kentucky our work scale to are their to Kentucky excited in to and we have look existing stores forward radii, leveraging hard located teams These Group very stores and at EG delicious

loyalty easier and much also is proposition X than by Casey's Rewards. a design is In redeem it they've to the way across we're makes with quarter, track our see saved to the and value members first members, resonating their see rewards, nearing million we the Midwest. our how refreshed introduced ever points, shopping excited program for app for The that

Our first pipeline share the the guests profit items with the the over private quarter, XX% store have we remainder of the for same And new XX%. also XXX gravitated and XX% label items assortment are achieving over products, of with the there; to unit gross approaching calendar quarter year. XX in our in nearly exited sales results the and in share

third our and annual on On report it's in the July, our website. ESG sustainability released we front, available

journey. put work a Casey's, of has lot and we're team a build in to sustainable this excited share business Our more on our for to progress

look to we the to 'XX and quarter has beyond, second about excited Casey's As fiscal of what offer. ahead I'm

innovative. to throughout but be will us The capabilities our gives growth the opportunistic and store be out sheet ability growth allow with we disciplined that laid and the in for to organization balance plan to efficient of expect been well results to level investors received come our on to June kind team that have and have from in we has at plan a execute the the and deliver place Casey's. continue Our high

results in ahead. forward seeing quarters our years work and Looking of to the hard the

your will take now We questions.

Operator

question Wells first Our Fargo. Instructions] from of Anthony Bonadio [Operator will come you. Thank

Your line open. is

Anthony Bonadio

quarter. on Congrats guys. Hey, Yeah. the nice

Darren Rebelez

Good morning.

Anthony Bonadio

guess are pretty us a of I clearly growing in Seems consensus mid-$X.XXs action, thoughts of you of just expecting. sort margins, normal about breakevens a some fuel So, a any were modeling number just on that 'XX of talked that seem environment drifting terms does stronger underlying but the gave higher. are as starting there And assumption lot with I then, than that guess dynamic? about you price you to when like thinking how a be that guidance? drivers

Darren Rebelez

think but a -- is nothing Yeah, you Like start a quarter I'll this Darren. And We balancing bit numbers volatility I our I'd a a normal of margin margin. look said, at when had [indiscernible] that. industry, the geography. little and for of our did Anthony, relatively numbers And there, in volume volume was here down about say that job first some that team from with really it note. volume those had and fuel standpoint. of X.X% great we just

think growth our positive I was So, great. gallon

years operating the I category cigarette I business there. may is up I a don't the have nine $X.XXX, as smaller those continued putting suggest the think moving is side, that the that prepared more with lot more the higher. forward, say to pressure prefer over of a we've last the operators that smaller be still bit little I conservative still of tick on the talked the of current remarks about think have is cost for terms the to would history, would of in margins The of folks a it In those the additional operators. but challenge recent mentioned pressure scale. over outlook couple those on And that quarters And the I a erosion environment of in

forward. upward So, I on bias would moving margin say if fuel anything there's probably an

Anthony Bonadio

just it. growth looks your for raised about But you a Got Obviously, That's fiscal unchanged. And left growth 'XX, costs. on very expenses. but really then, on guidance, like, it operating impressive quarter quickly helpful. by, OpEx on X% unit guidance

there? QX two, that? then assuming one, guess you holds certainly is good guess is constructive I progress data So a still your why And I what fiscal makes that point, more and about

Steve Bramlage

of start in This with or Hey, Anthony. I'll is Steve. maybe Yeah. guidance. what's out the

any expect units come the system, and the don't when strong the to for are on year the exactly raise speak, to that to of get the as the just unit did those we to to So, that based number that transaction, had. approval. us year require start we so close regulatory we've into mentioned, does timing We know EG the of going we

are our predicated beginning So we standpoint based still unit our unit the of OPEC count. all that of that the was initial gave year and on guidance on number so at from that original an numbers

will we just know in units when new adjusted those. those yet come total to we'll get don't clearance when for close expectations We haven't OPEC's because

know revisit of at clarity units can point impact try be transparent have metrics in and all in come as they of as the on that think second year, outlook lot end the exactly total have when more be I we we quarter, and you the we'll halfway those what the time. we'll around when may at through various the we'll So a to

Operator

One for moment you. please our question. next Thank

Bienvenu from come next Our Inc. question Ben will of Stephens

open. is line Your

Ben Bienvenu

Hey, morning, good guys.

Darren Rebelez

morning. Good

Ben Bienvenu

on last very in going saw high a comparison, the precipitous base was trends. My helpful probably off where year, just So, you of Ukraine fuel war. period is reasonably onset a difficult prices following of understanding that drop provided I'm recollection that the a or a ask, given we to color was quarter-to-date August

kind wondering that it's into much to decision and a what know revisit not So, year, you how don't But mean until the into first just what does of year. in bit compare quarter-to-date full typically I'm address period? further quarter the play get for guidance? seeing you're does the the And little you year the the I and guidance

Darren Rebelez

with Yeah, we to nothing until on. update year midpoint to this would I decision just that, point. where the practice going been Ben, It's our say into have what's visibility a bit the wait guidance do this not is to standard more our got that's Darren. at of

So update should emphasize, didn't that I typically we quarter into nothing that fact guidance do it, you the that. would than read just and the have fact one we quarter into we other we're before another

under because already make for the more stores, the the have stores did we We than we year. adjustment had on to plan contract open

adjust. how mathematically, wait slightly it just to we just and and were fuel obligated to just, to in the with one, mentioned our till we're felt quarter played was going on that second guidance So just his midpoint But out, Steve of else, like everything store. we inside below August the remarks, respect

think read I should into so And that's what you that.

Ben Bienvenu

question Okay. second Fair on is My M&A. enough. Great.

You noted a you've a But appetite is are there. to is pace the you? underlying in great market And I that brisk in sheet position. there start improve. The performance intriguing had to the to continues the your pretty business M&A with already options the still balance there presumably, know year. of are out still

Darren Rebelez

really who I mean, setting an tobacco And have appetite impact more have only Like I higher to Yeah. favorably starting sheet those flexibility costs we the I don't The deals, what's on have to up think to folks, mentioned, limited by and we've us. on been would have yes still do out macro for especially operate, is environment scale. believe. for really we have is mix the we to the balance definitely for say available both. that. the there. We're

been opportunities there -- us, seen that those market us just makes see dedicated so, that for we we've our has of in the have are pursue. for out, to we're looking And at and we'll sense for in have out that. a but M&A process uptick all team And plays how to busy pretty the definitely that good

Operator

One you. question. Thank our moment next please for

will Our from Bonnie come Herzog next of question Sachs. Goldman

line open. Your is

Bonnie Herzog

Thank to healthy. were quite everyone. your ask All which Good wanted I right. about morning, inside sales, you.

on maybe categories of especially then, of of just the us key business rolled the growth? trended label So, little that you've share maybe performance, where hoping maybe the could in the some just context that more you you're sort quarter, most Thanks. private it consumer? at a out and saw with how bit also where with And throughout you the for color maybe on your

Darren Rebelez

Yeah, I'd that and it sales Bonnie, X.X% with from really of across strength a categories. -- was the say prepared performance, and lot was over cycling had prior I foods, X.X%, up happy the we inside with I'd our start was year.

performance what like really it whole really really, And we So is led with pizza strong that there. pies. our with was that core about

and so, we that's our has be, thin bit a our in And resonated compared industry crust guests. out where about the innovation the chute that and overall. with a something really expect higher actually was menu hit And we little expected than was to it about XX% mix what well the that we've around gap right to product, with of to be

strong. was that So

innovation. Buns. the category with collaboration We in a have nice sandwich our result the was during of King's XX% Hawaiian barbecue and hot brisket a there, as category innovation up that quarter We from that other the on some sandwich did lunch

non-alcoholic good grocery saw On real up side, merchant beverages strength we the X%. about general in and

X%. were up Our grocery and X% up alcoholic category beverages was

across good more else. dynamic more a tobacco. have was Really by the some anything that's of than an strength board. industry So really, area driven I where in think only the really And softness we

we're were same-store private label, Units XX%. label. to up private up With close respect XX% to again, in

that we keep bit So, also proposition good but had what value the side, we're able a still and unit the that is of that relative to velocity price take on for little indicates guests.

resonating on been with and our that's to so we're happy really one. where we're at guests, And explore that

Bonnie Herzog

if color. that. follow-up And just Helpful a may, Okay. on I

inside which healthy. margin was expansion, Just quite thinking also your about

softening a to attribute -- the costs, did sounded ingredient of it it cheese. of You lot it, specifically like

continue about the mentioned, for So some your And growth, some Thanks. driving how to the offering Is hear of Darren, your margin what and margins? evolve performance about that think innovation what store? has of just of that's you should the you're been about rest you kind year? curious as think of how accretive impacting then, to we it thinking you as in

Darren Rebelez

of I'll and that bit about little and the margin Yeah. let cadence. sales start drive leaned drink on the I when heavier of fountain innovation, little talk mean, over to that out not drive at drive a respect that summer traffic I'll well innovation aggressive with and we there, With able did value offers. we've on innovation, to on to a discount with food and to promotion, But less look side, the innovation the more some But, traffic. really do that bit we and more worked the we've a drive been to really focused volume. Steve we've had to the

really we its is understanding culinary They developing is stride terms so, what's are really guests. And guest the products. our And those in and team hitting are. needs those what hitting specifically needs, with that's resonating of think the our team

it's of And to growth drive to discounting allowing that incremental lot there. without having get do so, to a us

Steve Bramlage

Yeah. this Steve. is And Bonnie,

part guidance business. improve generally that's change certainly reflected on in is inside side the we conjunction think gradually of year-over-year, becoming margin and tobacco, of the to in the the the you The side margin is prepared going expect opportunity, I flatter speaking, label the food naturally on real mix mix grocery continue of to to the with, private smaller the know, business. grocery a as

XX% year. so, remainder for of And cheese on hedged buy we're this our the

cheese the good saw with business. the won't as spot, quite will quarter. first we about give variability in we on as but good side so, the XX% here to to upside kind exposed good and to I quarters. generally spot us as less high-single cheese the feel first to but in the XX% digits in of year-over-year QX, in here on sit mid the much We're hedge the now QX of right We deflation And out quarter, the were QX

pressure on protein large, less And by there's and of that business. the side still

the good think on food And so, to that the year margins feel will show continue I on prepared the of the we still business as we side improvement year-over-year progresses.

Operator

Thank please question. for moment One our you. next

Kelly come will question next of Markets. BMO Our Bania from Capital

is line Your open.

Kelly Bania

morning. Good questions. taking for Thanks our

Darren Rebelez

Good morning, Kelly.

Kelly Bania

comps back Good circle the August. inside to morning. I wanted in to just

a maybe prepared of fountain a on term? bit little like that give think ticket, of summer? little this was near of maybe deceleration but just promotion Or anything this impacting a is what you with there, Sounds kind can about color should seeing cycling food? Or grocery, the we off drink traffic, just that's you're bit trend that done over the

Darren Rebelez

Yeah, Kelly, over trend saw traffic little the that store. up we into saw foot We the throughout actual into had in continue first, quarter. we -- still well, And traffic a were August. say we X% I'd good

and promotion at August. -- fountain same So running time we the were throughout that

nothing two-year been I really the had In opinion. really than consistent there. first deceleration So I the pretty we the we're in with mean, a comps, issue, quarter. it in think, issue is my more where cycling

So higher comps -- September and as some again, well. coming into we've got

still focus those comps, start that sure So I we two-year when little bit to the cycle make maintaining that I there. don't stack on over -- to momentum and higher more a we're

so seen. what so, And we've that's far,

than concerns the little I where don't absolute being so, And bit a number first we about quarter. in lower have were any the

Steve Bramlage

Yeah.

Kelly, inside our I reference, for X%. number the just almost was prior think, in year

that. of indicative been have would August And that. cycling we're So,

just lapping anything. prior than you are in year more And really so, the it's what

Kelly Bania

you're prepared can about helpful. wondering loyalty also this innovation with getting to you read just maybe maybe of if if how was your if data, reaching base? these you're analyze early is innovation, or very if talk prior of cannibalizing or incremental food products, That's on to customers I some before, reaching weren't you kind that customer your you're able simply your new is your use Great. what

Darren Rebelez

Yeah.

to sales of on what the been been has truly particular, the think were suggest would we that crust And category. about, And on thin about new buyers of business. really in incremental pizza some is pizza prepared side. food into about by data of So that the we our happy we've far, XX% with half the think the loyalty those performance

XX% before, words, people new So, from in guests us pizza other about were buying entirely. that weren't

And if that certain a there the was we offer. so family really that helpful. that's don't that's vote have into all guests really been was hypothesis in be want. are that And going crust they our thin And veto going that that's a to

far, that. rewards would that's out. validate played so all And And the data

Operator

One you. our for Thank moment question. please next

next Bobby James. Our question Griffin will from Raymond come of

Your open. line is

Bobby Griffin

morning, taking my questions. Thanks everybody. Good for

Darren Rebelez

Good morning.

Steve Bramlage

Good morning.

Bobby Griffin

them talk you start gas I wanted behavior we the not sequentially? guess, saw customer last started about but change as to move we anything first, have to have see back small seen you peak any levels prices in or see I up. up maybe move Still to at year,

the So, if just high anything curious of in happening was see about prices? you're gas very starting to prior period behavior similar to what

Darren Rebelez

price a below they gallon, seen still gas in last the year were that. And dramatic hit $X haven't we is about Bobby, peak. shift where we a No, when

is So, do some lower-income consumer. the acute see we gas. on Where pressure probably is really not behavior as on in the changes

have reminder, a fit more than guests about that only of our about would -- We overly category, quarter a are not we exposed a three that in are consumer. $XX,XXX to make year. As quarters

that income. And so, they're out of lower

And so, fuels gallon around XX% and ethanol do for growth some at that on lower-income about buying offering EXX higher consumer, we the in our see They're quarter. fuel. shifting blended

some more X% year-over-year. sensitive with of bit in And edible up from categories like that. that take-home are a some little in label a primarily but dairy the and Private were pressure some would them, little EBT some be by consumer. indicative and obviously, we subcategories, grocery, lower-income grocery is we're category, seeing that's even pressure that within purchased So frequently still that more of

impact. gas not behavior So, the while it's lower space, a of we having end, for is overall big the little bit total think a changing there that at

Bobby Griffin

I me it. appreciate And secondly is the OpEx store and for in That's All the then optimization. reductions maybe on right. helpful. hour just strong with performance ongoing

and finding that kind areas you store detail are anything optimized? are where of getting on kind where more in Just still you're journey, of of the what

is secondly, out across certain more getting seeing you're identified it has better very Just guess, performance that of is of? any around a that I or been we're hey, savings, regions optimization because the the like, network And stores strong. in we've these it further clarity there, subset

Darren Rebelez

where year been No, Thanks. been on this. really proud a the having improvement first bottlenecks team that's for impact efficient. tell just them to on we over make what now. or going where on we business continuous And are operation, is processes that are the has an those labor I'd taking is a working our store they're scientific technology in employ And change more and I'm not really can this those approach you to Yeah. how spending of that

And OSAT feel guests. good our but hours that taken scores our up our we've these the among members so, team engagement and fact scores up out, our are about really I among are

an a that guest just it's indication simply impact having on and this negative running members. we're team effectively not business So, more or the our experience

of for low-hanging our you a exercises, there's you sustainability, terms has a or fruit OpEx roadmap better. the But some the go identified one store get they've slack whenever store three store to that team In these or continue of and the into obviously, next first. initiatives to out can more we of give the that take the implement discrete and run that years of pipeline

go these few capturing feel years sustainable, we is this we still opportunities. of to terms have and in So, all a

Operator

for please next moment you. our question. Thank One

Irene will next Our RBC Markets. question of Capital Nattel come from

open. is line Your

Irene Nattel

good and everyone. morning Thanks,

Darren Rebelez

Irene. morning, Good

Irene Nattel

is subject back Good great to gas I investors. which the obviously come interest wanted of all to to a morning. margins,

with more in range. noted, and versus guys the something to So, the sort $X.XX towards what, it's it a of comfortable five or for would high-$X.XXs get guide as even soft you quarters that What $X.XX been take you you've that in around mid-$X.XXs?

Darren Rebelez

really a that's Irene, Well, nuanced question.

to just to comfortable, mid-XXs. to me doing we kept suppose. get get see For it, just there more I we have it me a Admittedly, more while because comfortable with took of got it. I But

exogenous we more to I were came think last get able $X.XX event. that on everything the say those I quarter. Ukraine, an of through so, going And with last $X.XXs would kind to in year, saw spike in of we this

before margins low little normal been that, of normal at very comfortable I a level, more $X.XXs, see we've long. level. would But at to timeframe at there -- for want macro the that this that I'm comfortable because So, and at the underwriting environment feel bit longer so $X.XXs. of a more upper I'd mid-$X.XXs, level

Irene Nattel

And noted on in Fair expectations? cheese that's very price? of activity. What you. Thank in and you multiples XX% also are of helpful. At you're enough, seeing M&A couple an prices. And uptick you hedged a on then what One, you just that noted terms follow-ups.

Darren Rebelez

has a EBITDA. interesting would been the has of we're like company there, think to an I given Well, but I these with been but the of a that counterintuitive able some at of I ourselves of increases gone multiple hanging players smaller kind scale lower that it's I'd the EBITDA it's offset these say smaller that multiples margins lot level actually the expectations, dynamic, seeing, of way for really operators because to. that's in know say that a the down, so a indicative able fact are in haven't lack cost And

though lot even just they're a under so, pressure got those higher they've of margins. And

And our to so, worked think that's I out benefit.

And part question. second your of I forget the

Steve Bramlage

to Maybe, that. answer try I'll

correct, and the hedged, out that's cost little XX% obviously, the the we the So, We, bit first we lot we what But different that's quarters pay. hedge quarter. spot. for current commodity, all-in a in looks the equivalent the a like incurred all-in at than are that

strip or that like current number the the looks rest So for of our (ph) here kind year what of low-teen about at the [$X.XX] is spot.

Operator

moment, question. you. for please, next our Thank One

Our from Suisse. Credit will next Silverstein Daniel question of come

is open. line Your

Daniel Silverstein

Thanks taking Hi, question. for morning. our good

one on acquisition. EG the Just

serve So Kentucky. like and will Green Bowling metro which larger areas Lexington, deal denser, stores, some that add

landscape more to wondering larger to areas? Thanks. And you're those given view the today? penetrate Just markets challenges the seeing and opportunities if brand Casey's of bringing the you opportunities how denser

Darren Rebelez

a is that's Yeah, Des than markets operate significantly Lexington, lot like comparable to we we in aren't Dan. think Lexington the markets and Moines markets city based. in Bowling real those about we're When or where today. a Green larger to size of

level. comfortable by York This type isn't And very Chicago any Los or we're or stretch. that so, Angeles of at a New scenario

Lexington a market great And so, Bowling be us. both those a of for markets. Green market to will fantastic if for been us. I've is

comfortable we're and very size. -- in towns of So operating this

there. I any have concerns So, don't

Daniel Silverstein

you. Thank

Operator

one moment And next question. please you. Thank for our

will question next Our Katai come from Deutsche of Bank. Krisztina

open. is line Your

Krisztina Katai

question. label. good ask morning. wanted I taking to Thanks on private the for Hi,

and us So significant growth. with areas Maybe can seeing shared you're result. that the out the you strength? called talk gross think XX% great you XX% unit you unit share particular Any contribution in a profit you are is about where that where process I rollout? of

that are is is, are performance? Or my any areas So, particular there driving question broad-based? that that

Darren Rebelez

And products. private continuing into Krisztina, go another the optimizing year. will the to items of We've we're still end got that -- we're by the Yeah. same the label assortment XX the evolve portfolio. at time, we're

the remove atrophy bring So, start assortment to little innovation. new we some a and from as we'll in bit, them products

And that our private so is with. constant operating that's process team a label

certainly of in to water water water now category, sales. bottled respect about bottled private labels. our up With that about was strongest, strength, saw And where our bottled XX% XX% probably we some is our

summertime, strong Obviously, the seeing bit really seasonal year-over-year performance a little in that. there. in So, great but we're that's growth

of sales and XX% summer now with that's saw really pretty same-store a category chips. that's had strong as tough And chips, this a penetrated. the new But And statement. that seasonal category new for that that in that about in we innovation a In because category, were north some some Another very flavors with just category it's usually again, it's is competitive well. category. landscape is one been XX% big competitive

seen base are strength, broader we where we've that like of those standouts we And so but far. are there. the So, really some we've seen the kind

Krisztina Katai

in thin I Have taking or mentioned, the anything follow-up. pricing? ask competitive guests Or the the do following response pizza was my pizza around just changes introduction. you any any going think, seen you around you crust and, then that XX% And share? landscape in promotional particular, to great. I to That's anticipate new you

Darren Rebelez

me this at major little a to We from we've hard whether the competitors. any it's of point. for bit say share -- taken Not

be our mom markets, a competitor In rural and a that's competitor, in not more part, if primary of For there our of one. there lot pop. of most in cases, is may pizza or the is most markets, a more our one, if we have

but to in thin uptick So promotional that an launched from couldn't really we've the activity difficult we've I seen tell you crust. competitors say, since

struggled I little a think from a the standpoint. other have bit velocity pizza players

they're done. get what starting more to I seen So, a but I haven't promotional we've a think result anyway, little any of change as

Operator

Thank for you. please next One moment question. our

will question from next come Lawrence of John Our Benchmark.

open. is line Your

John Lawrence

Good morning, guys.

Darren Rebelez

morning. Good

John Lawrence

in Would that maybe markets? couple last the and bit and quickly products, little get product faster? and the running maybe of about some those app you of you in some the And have years innovation, of class stores does of does with new some new up innovations what discuss of a those the help this new markets? How the little ramping a new noticed

Darren Rebelez

John, sure that we've in a has the stores. the in have so of way years. impact being been with had seen innovation not happy we've really Yeah. stores I'm said, of That couple in the new the difference last terms our ramped new

high sites ability more identify potential analytics to that's under the get advanced to sites think to real testament a use I their and and team those really contract. estate

increase And stores those quickly we've seen an have in ramped so, general. in how just

stores. people traffic helps only helps interested that it stores in innovation gets more in respect, the the those that and and into feed think I

John Lawrence

secondly, remind a bit us little that Great. And margin. fuel on

at Would You prices, of the Day you're analytics data, that, you that about the to on et help of some on some please? cetera. gas things, of Analyst the tools using us remind talked with

Darren Rebelez

We've some the tools. for Yeah. had the just pricing need of -- given analysts a information to informed they We've that decisions. make had more analytic we've essentially more number years,

allows is got to priced. any they at given a are where so time. We've information see So from data they've got feeding that credit market, moving real-time the commodity cost them card us competitors to know where

information and a they they really then so, store. inventory from have And -- the have

given So, factors complete influence would any all the at a picture area. they price particular have within that a trade really time, of

And so, a decisions more informed result as they're just simply of able to make that.

Operator

to see now remarks. back to queue. questions you. I turn Rebelez Darren I for no conference in closing would like the Thank the further

Darren Rebelez

you their quarter, have work hard before sign Thank the today for to thank time I on off, rest the this to And we join team taking and call. the great us all everybody, the for Okay. members a want day. of

Operator

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

disconnect, have may a You now pleasant and day.

Casey's General Stores (CASY) 12 Sep 232024 Q1 Earnings call transcript