CASY - Earnings call 2 2024 | Casey's General Stores, Inc.

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Operator

Good day, and thank you for standing by. Welcome to Casey's General Stores Second Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Brian Johnson, Senior Vice President of Investor Relations and Business Development. Please go ahead.

Brian Johnson

you second us XXXX. quarter thank results discuss and our from ended morning, for to joining the Good October XX, am Vice Development. Senior Brian Relations I Business and President, Investor Johnson, Chair, With are and Bramlage, Financial me Chief Chief Darren Board Steve today Officer. Executive President Rebelez, Officer; and

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

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

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

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

said, to that the our I call over results. With to Darren? like discuss turn to quarter Darren would now second

Darren Rebelez

good results discuss and moment. everyone. quarter Brian, We'll excellent the second morning, a Thanks, in

want excited First, our members of to our the We're Texas XXth and work. to including new the team I Casey's the state for welcome to their state hard Texas great community. in thank dedication of team,

for know and over by Hope year's million, in entire when This For dedicated Children speak annual just I I causes. -- The caring resulted team Patriots. our outcome say in campaign for guests Veterans to I great members extremely Fallen $X.X response and our an two team we're from Warriors the and humbled giving our November. campaign outstanding of

rounding our We are act their for their of generous so grateful to up guests and communities purchase.

at have a our families Thank myself, campaign, our who who partners the truly guests I do they team know Casey's As and PepsiCo, made to great veteran this our when these at and the Casey's. face. you they and shop to contribute members challenges sacrifices to good especially

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

quarter second year-over-year up ingredient costs sequentially improved sales same-store were as store, despite a both last margins year, the and while lapping Inside very strong improve.

passing our to the more volume here are unique quarter, company's EBITDA are side fuel strike we business X led it quarter, the fuel another margin. costs. balance in to strength macro significant was that impacted the there right With quarter, our first highest becomes to Similar higher the fuel stay. the and in events the business, first of wholesale On on of no full continue between strong each industry display. With margins model that months evident to history, again which the

store, to hours inside score down overall job by continues the both team same-store the up evidenced do was points The an excellent our as being XXX efficiently and X%, operating while business labor basis over guest outside prior and year. the satisfaction over effectively,

with this would margin I or strong categories. performance up in XX.X%. go now to in share We and of second with of expansion XX%, or pies, pizza year. X-year quarter from the stack sales Beverage pleased saw over of our basis the XX% were on and a results of quarter. up an X-year Food from bakery XX.X% each X.X% were also very inside the same-store the Prepared with margin like sales a details XXX X.X% prior We're approximately an basis the stack average continued Dispensed some whole notably points and margin average on Inside Same-store basis beverage. dispensed up

with performance was [Whole sides. the notably in saw well Margin during and softening pies] impacted by appetizers performed cheese the also we quarter. strong favorably in commodities, and a quarter,

value an positive basis saw beverages, and and up from X-year General Casey's well of points continues prior option performing in year. with be the program in in category, quarter. to We were private sales increase Grocery a momentum stack alcoholic a Same-store the XX Chips bottle margin our notably XX%, or label the with great water basis average on X.X% an Merchandise X.X% of approximately

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

between results growth margin fuel continue team the show to volume striking and right it. and balance the Our is

$X.XX have the X for fuel margins been a the marks quarter with over This about row and gallon quarter in gallon. per last $X.XXX of per tenth quarters X

data our quarter. Steve now the over approximately in the sold well Our as X% gallon as geographic outperform for like quarter. financial continues Mid-Continent market results shows the the fuel turn the I'd down to second call region, Steve? Opus discuss to to volume to

Stephen Bramlage

good Darren, morning. you, Thank and

second the the and year inside was testament our that's stores Our operate challenging the while business performance resiliency we to despite quarter our of in fuel, This to results last quarter efficiently. continue a second model and was excellent a team's with great as the saw from comparison execution. and we

X% billion, due revenue. X% of increase primarily billion, were inside $XX $XX million of quarter from $X.X increase $X.X prior or year. for and Total inside or year the million an revenue the an that's sales higher to from for prior quarter Total the was

increase year-over-year Retail For million operating the were quarter, $XX Grocery fuel by million, increased X.X%. $XX General also $XXX and Prepared increase $XXX Merchandise rose favorably million, sales the gallons a partially Beverage X.X%. offset average to was average $XX a impacted $XXX sales in per and million was basis. more to a X% in on of million a Results fuel of That compared sales a gallon. Dispensed up by X.X% million sold were to an stores an quarter, by the of to price second $X.XX gallon, in $X.XX by the decrease as year price period during ago. Food retail increase retail

profit We X.X% higher gross X.X%. year. define revenue profit quarter, and of gross $XXX $XX.X both less goods $XX of excluding of by an of cost but This million the or $XX.X as gross increase amortization. from million sold, higher of second Casey's was gross profit or in million inside had the million fuel prior profit driven X.X% depreciation and or

from was XXX that's Merchandise XX points was XX%, margin basis from increase points year. ago. XX.X% Grocery prior of and year a basis an The up and profit gross margin Inside discounts, increasing and vendor-funded in primarily The prior well increase label mix. as LIFO charge was favorable due lower promotions to of share volume year the our [debt] as a private its General

$X.XX Margin year. pound prior LIFO The a from the lower from prior and a of X%. was quarter a up decrease XXX XX%, a as Dispensed benefited category last specifically Beverage margin from costs points benefited basis Food compared softened. generally in Prepared which about input costs, $X.XX lower pound charge was to commodity also year the cheese margin year, for

from prior $X.XXX X.X% we margin $X.XX the to from of prior the from benefited expenses Fuel the gallon quarter. per the as RINs, unit is operating XXX up profit were $X.X million Fuel OpEx of increase gross gallon by quarter quarter for due million or $X.X year. sale year. year-over-year. in operated $XX.X million the stores second the growth total Over the up same was more down X% Total per in

for increase, increase. offset by in mentioned. variable reduction hours, compensation, incentive rates the in Darren maintenance partially composed incurred expense same-store increases expense repair, as were Same-store previously accounted insurance wage the and the employee of total that X% higher of The another company also X%

prior stores. in effective Depreciation up to year. the versus versus $X.X quarter was rates on was the our tax and $XX.X expense cash the interest rising by $X.X quarter The quarter, for year, that's with interest prior the Net primarily XX.X%, down was million million balances. aided the year, more consistent in operating million prior rate $XX.X due million,

and up Net quarter an to income of XX.X%. $XXX.X EBITDA year increase the an ago, $XXX.X was year to was million, increase $XXX.X compared prior for of million million, versus a XX.X%

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

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

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

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

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

of occurred in transaction well November closed will with occur transaction Our deals on continue the expand. has in transaction are Texas, mentioned being the closed, quarter. second the The which M&A our cash integration hand. state XX our XXth Group payments as with to strong, includes they in funded third the this of of and EG that stores majority or capabilities as and on The quarter XX. quarter last And other these remains pipeline either announced

sales be be in The X.X% expects million the of inside and performance shares of year. long-term and XXXX As is strong strategic our year-to-date, approximately the approximately expected interest expense plans the to XX%. fiscal XX% updating increase expected with follows: the fiscal now goal to for is repurchase a as expected Same-store unit we $XX to be $XXX X%. outlook to year. financial line in throughout Net now tax least to rate to are growth XXXX at to result also growth company the X% expected fiscal is EBITDA million, XX% to are

stores expects first company add more XXX. least the at That's the planned to quarter, than XXXX. in discussed originally As fiscal XXX the in

are expenses approximately approximately X% excluding X% operating operating expected credit total As increase expenses, a year. only expected this, result fees now though to for same-store of card the to are X%, increase to

amortization approximately to to we sold negative And are XX%. gallons be the is its the of positive company to be expects now million XX% property same-store $XXX the and following for and inside margin Depreciation to The $XXX X%. is million year. outlook $XXX fuel and between to be approximately metrics: not purchase The for be expected expected updating company X% to million. equipment expect

now terms, gallons updated is versus the favorable the on and expense Current a the approximately well million not total we reminder, gallon. as integration modestly results favorable be quarter the of outlook. the third several a per to we and $XX store November X% First, not in are with the outlook approximately If year, of CPG growth due dollars OpEx midpoint sales the the Fuel annual a fiscal total near had benefit as And 'XX, due onetime the teens operating up to final quarter. resolution X% and quarter lapping benefit a as from expenses costs. prior primarily for be This in benefit lapping Thus, note, nearly low of current operating up the to percentage matter. onetime that's of third follows: would prior costs onetime in will of third this the year. will were legal million benefit as cheese range of $X.XX are inside recur. quarter Our are near annual onetime consistent same-store are

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

Darren Rebelez

so results. the like it's outstanding for proud of stores those I'd thank Steve. entire we're time everywhere. of to Thanks, serve products. team guests another a the consumers that ability quarter members with challenging team our high-quality Casey's for And and We know of to

continue gross X.X margin. and guests in label Casey's saw And gravitating Rewards million members quarter to private today. to and on we during Our as inside and continues the units program see have a we over profit impact towards positive are our shine, dollars growth favorable

Dispensed pies to achieved which innovation strong. Prepared the launch quarter. On of also share has Beverage XX% Food throughout the Ultimate out the well side, continues Crust the sandwich, a breakfast The the the moved and to Pizza and do come Thin team of daypart has of whole gate Waffle breakfast for

for Our and maintaining effectively stores team out while done has The of all continuous improving deserves efficiently quarter. the another it hours improvement operate and in guests X% team price to member team was able take the or same-store labor satisfaction. to

and in ventured expand glove to geographic complementary continue into Eastern our store have our while which Southwest think our with fit footprint. and we've growth. Texas, we We acquisitions hand strengthened is also footprint count Recent in a Kentucky Tennessee,

existing of it our geographies. suburban radius, within and are distribution Casey's stores the rural the of playbook fit All

to we side margin that has dollars. our reset the the gallons. becoming are quarter, passing focused to our both team profit higher on gross and fuel due and industry of up, a On higher with another And fuel that necessity stood With operating the continuing quarter, in more fuel had each strong the we've we we're capabilities business, confident margin expenses, environment. maximize to

As we and plan. fiscal I'm and excited to our beyond, our Casey's ability the second half look to of strategic about ahead execute 'XX

take growth opportunistic Our throughout questions. be innovative. and disciplined for and sheet growth the balance our to us ability organization We'll be capabilities now to your store will allow affords efficient but that the our with

Operator

[Operator Our comes Bienvenu from question the of line with Ben first Instructions] Stephens.

Ben Bienvenu

on the I you want up to on commentary follow Steve, gave quarter-to-date.

the that period the XQ Does sales outpacing same-store the similar of of the looks while composition Prepared any November, the within moderating that of of, inside would results guidance. Foods but divergence helpful. And in if sales same-store includes strong, the to I you that grocery. and annual month second December, is that that can grocery noted Foods on and in of growth You offer sales the in Prepared color kind very range remains don't same-store stub quarter it's guess, I the know be

Stephen Bramlage

the part running bit it of Darren second commentary bit and Sure, The talk about a little the let to of the quarter-to-date, Ben. I'll includes so quarter. answer is that first little within Food Prepared be quarter. in to meant period December. experience for yes, similar And stronger range the experienced inside a than the total bit little into were what we Grocery stub annual a in and generally, quarter-to-date is second a

on do couple Darren, comments second quarter a you want experience. of to that

Darren Rebelez

Ben, that in second that on And was tobacco side softer throughout quarter, specifically the of General I bit that the In was Yes. that you've industry saw a in some seen quarter, in little volume Merchandise some cigarettes. we strength category, other and significantly the Grocery the and cigarette the of primarily second so the categories. softness think offsets

talk degree, to in don't some We saw beverage like see well. a us encouraging to typically didn't impact certain business but concerning. little cigarettes and But was that anomalies, from bit that of first is a actually we Food growth into anything our weather of what also about, And October does as very I second. Prepared the I the outside I which was encountered accelerated that think the to quarter it the trend-wise

XX%. X-year plus And a very strong so comps

business perform overall the seeing we're so And very well.

Ben Bienvenu

second guidance. My question operating to related growth is your Great. Okay. expense

that of nice that a be XQ is in on progress -- a implied else you've the there? comparisons XQ labor kind pretty raised to step the that on the growth guidance Is year-over-year given You XQ is what hours. or in updated you of you've given made substantial will and in elevated that noted it from down You just period function going XQ. growth in commentary

Stephen Bramlage

be Yes, of almost the the and would and third combining then that recently, activity the the that, EG the expect of all dollars to have a year of highest and third in Ben. total which all acquisitions, of fact million Texas start integration-related you're with all have I quarter. several year-to-date now last with hit closed that's year-over-year I'll us transactions, growth we benefit that will in purely had OpEx relatively that certainly the quarter, the of function these we'll and lapping

into units would albeit I higher back of can with expect number into be we would into rate -- that normalized number back fourth call we the so mechanically fourth you back in And quarter, quarter, the but to be X% those a more cards, coming testament the in well a would managing run OpEx at that and should the gave a just -- is right to the system. excluding very be consistent quarter OpEx, quarter number that now. But that's mothership for and we the in out, number stores how same-store credit

Operator

comes Fargo. of Next from with Wells Bonadio question the line Anthony

Anthony Bonadio

on nice Congrats quarter. the

number. think ask just So to just mid-XXs about around context takes guess, two, I the a per why fuel XX% to to of to half you the it? different growth about higher new can that that getting talk the right the wanted margins And to one, that's in new right something and I in number? then the little I'm is way EBITDA that. get then the guidance. puts back implied just And about X% gallon, maybe in

Darren Rebelez

bit that Anthony. prefer conservative Yes, we out said, fuel being we've That category. to volatile quarters, to in be of be the a $X.XX margin, tend X pretty those know, it's With we you last on because the as X respect a sure, to seen range. forecasts little well

-- pullback see cause conservative that would margin, a on being just we're that specifically not we're anything don't in but fuel So front. we

modeling. the it really that's in so of terms And about

Anthony Bonadio

XX% internally lot flowing you well another I that quarter favorable. of how talked environment, what between know guess seems It things kind think just like like through can investing the of being And as you have of trade-off of about about thinking that term. about as margins. just the talk current it. over of strong a the as guys we're are I the very doing just there. sort Obviously, I today? comfortable on remains the long around And in you're guys mix things sustainability seeing level then you sort Got about Okay. inside versus value?

Darren Rebelez

lower-margin the being of we that's tobacco think When for favorable at a look category are becomes mix that with the margins of of one margin in sustainable the Well, a you reasons. evolving categories. category the a how the mix business, Yes. assortment to is percentage couple as the reliant the and heavily size shrinking that the total more as higher-margin of rate that on categories

Prepared The business. of second piece Foods is our that

Our grow, saw in continues Foods and Prepared margin you business. expansion business to the that

you a our say margin. which more private third would so combine the thing blends to I And label the And two, those continues inside that's mix. margin the is grow when portfolio, up also sustainable

three working things those are us. So all for

with in through respect Now do invest a value brand. we investing certain to our extent to in value, primarily private today

even And represent so to value the margin significant though with are our guest, us. to label those highly they accretive products, private

well. out works that So

from and And to consumer standpoint consumers what over Grocery to it shift as see of we're a General starting spectrum, Merch. opposed more is to recently, Prepared the seeing you're Foods lower economic at the end heavier

that see side. a on just products you function some Food the I relative Prepared think of the the other our other packaged snack versus good that's and products of represents value

that of margins. constructive So is all to

in we value extreme why to think that's drive need the to offerings sustainable, so maintain and traffic. don't that's and engage And we

Operator

with Our from the Bonnie comes Sachs. of next Herzog question line Goldman

Bonnie Herzog

a in general had gross merchandise. question on your I

bit same-store were soft. your First, a sales

but you're hear SIG I QX on more Darren, on bit this? that business more little to on curious any to just your to And the category of pricing these and of possibly sales for your drivers if you color if versus wondering changes So making a SIG pressures. nicotine decelerated called SIGs or know some out, quarter, the mitigate color

Darren Rebelez

Sure, Bonnie. Yes.

on decline And about last category. on price the and category X% the and offset the what the were pass that combustible unit on price think in positive relatively this in just do we've is the with I dollars stay flow and still and typically, That the quarter. SIG cigarettes been to not down able have was case itself, through quarter.

think consumer a reflection extent, I now. where the right to is a of that's large

cigarette income As the you be consumer know, a consumer generally. to lower tends

a so trading frequently of what to or bit down seen brands. down consumer not into is And that lower-tier trade buying as from either we've cigarettes

where team is category. from our cigarette so on to others. significant And is here But it not as go for the category also a as assessing that's us for

to dollars a accelerated were react. are feel our profit So our don't growing we rate margin. on We constructive an the knee-jerk we gross still at I strong had still quarter. mean, relative to peers. need

any time. don't with to to And category so do feel pressure play something We'll different. of have how sort undue out things we over see that

Bonnie Herzog

sense. color makes your also the That then of expected, outlook Yes. how weaker your dayparts, in maybe things where the maybe months stronger especially that curious and last morning to have than daypart. changed maybe few consumer on just on And context your the hear color the and in or

Darren Rebelez

I if our I'd just we are our X/X geography. guess of and base, consumers And cost a that back at I about our everybody very living make of remind year. low in given $XX,XXX over I consumer footprint, a geographic Yes. look step

XXth cost in expensive fact, operate living. is ranked state in In of we most the

to [ ] a go tends So that $XX,XXX long way.

guests, consumers. change consumption other So which The on behavior. seeing that XX%, changes so, is of really the or XX% with not seeing any we're lower in we're cohort income are

open towards there. And seen cigarette we But more more of gravitating do They're label. guests. been are that's speaking, cohort towards buy, were mentioning. fuels. private in like a ethanol-blended and they we've for have just on things They're what when that both of just in pulling our they impacted, generally premium fuels Their couple buying uni-velocity back and so purchases

the the flat the and money. good we of store our the And gallons we look were store. So we of was guests feel offer. flat our quarter value outside as traffic that XX% believe that really proposition still about inside forward, for a value the over our offer we good

gravitate not towards suffering people we're proposition. lack we're more value Foods as and a seeing from so of Prepared a the relative traffic, And

So the look really we to still forward of our geography. in the feel resilience year, we we as about good the the consumers think balance of

Operator

Our line next Raymond with of James. Bobby the from question Griffin comes

Robert Griffin

first segment, we it on the possible get was the so little guess grocery kind the of how for me ex just a question to of better I of can tobacco? size drag is a business is, what bit the performed tobacco flavor

Stephen Bramlage

we Yes, top about been tobacco Bobby, would grocery. points ex have line and growth basis higher XXX

Robert Griffin

helpful. that direction very function hours then, opportunities I just kind on quarter. those the Or performance That's is labor And Perfect. guess, new secondly of a and task of this I this for me right guess? other as is the the the store, given finding turnover inside continues past, we've move and Is combo great discussed reduction? team the well? in are overtime lower is both, that kind of to the Or in of and reduction a the it

Darren Rebelez

continuous be team, of I'd it's impact. say take combination both of nonvalue-added it's we stores. out work improvement primarily a would can the That though, really, the Bob, primary identifying Yes, driven, by the that

The we're using X% training less of has when the actually reduction terms dollars, So wage out and rate. that's you a labor in hours. factor in in flattened hours year-over-year but overtime

up average year-over-year about dollars, if but So wage is X.X%. flat about you our think

So bit, flat. about that came a down training over was time

training turnover. at it with to when year think continues reduced as rate big were taking we overtime was we is was same it the The turnover and of the but it swaths as year. reduce, a dramatic really just So out not not last last combination, as

Operator

comes from the Our of Northcoast. with next line Cerankosky question Chuck

Charles Cerankosky

and are about Everyone. delivery. that available of What number the fine-tuning are of do that doing the pizza calculation. of still to is and doing stores labor hours How to the still much Great they're question the help around quarter. I've hour hours. number store got able delivery the labor another store you days pizza

Darren Rebelez

would Yes, that probably upside front sit Chuck. limited that here I as on today. we say there's

whether there. say process make dialed evaluates team adjustments overall that determine point. we operating this But to to need would hours in I Our at is constantly that, pretty

there. just be and to So fine-tuning here

of terms delivery. delivery, number we still are a of have that to small stores doing In labor relative

about I think call delivering through they're stores. this it's the Yes, is parties. And it a point. couple so ourselves. XX%, rest at of hundred it third of XXX

labor a when us. don't impact the delivery because not impact order only to driver that to in. for that's at delivery. a So another for we delivery, store, have delivery more we delivery. far waiting is have we pay margin It efficient us It's way that for But come a per do a

for that's So running probably well. as us

Charles Cerankosky

Okay. products, on where is on where And you of number at SKUs? label And then goal private are that? your

Darren Rebelez

just XXX assortment and expected number got that We've and Yes. in taking SKUs quarter weren't performing SKUs the the a result some in of of as out well adding right now, that's then a last as we them to.

There's of The products that still a count still, private label there. team's several runway plenty pipeline we've be introducing we'll started. over we've that of the SKU since next quarters. on highest it's So had the got

label. And different of tiers then starting we're also private evaluate to

significant uniqueness. premium products that and quality elevated think but of national a So value be would brand, still versus

of go there. So way still a to lot

Operator

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

Benjamin Wood

Wood for is on Kelly. This Ben

you've outpacing gallons, So solid implying gains. peers be be public to down for for X flat outpacing commentary period, down quarters, the that the single had share digit your seems past where seems market digit mid-single pointing low in which you broader where compete towards and to industry pretty

the proposition Is on margin is gains? or are the it first, share you Or you any to bargain those investing So can some loyalty customer? value fuel provide think driving hunting inside store? market guys you what the color get

at sustainable the your to to and pace, strategy is drive industry more change mid-single-digit the independents that through gallons chain and generally, just are to some have more losing at second, stores. competitors And a going to point, then term? try operators some if are their gallons small longer Or

Darren Rebelez

and part first it. years flat here I've growth first. the fuel step fuel the of which not fuel we're changed strategy, to our for to driving maximize dollars The take fuel. going here, since me gallons balancing in now combination a is let and in to been Yes, gallon dollars I drive in be margin. team been and If has X.X our profit I've gross stated That's profit gross back,

look And at that a any fuel margin don't number so to quarter. number we and in given try achieve

two maximize to is goal dollars. Our profit to balance gross those

I so and the flat we great of gallons, maintained a margin. example quarter those like a $X.XX And quarters, doing this this flat you we've in that. were over gallon several maintained north think We gallons, on last said and of was

this were going I industry about you $X.XX margin to is on geography in OPUS now, fuel right our the what's if reflective of Now say a gallon. look in was at think numbers, OPUS the would and that

that were in were the clearly. that So gallons are. also said higher below where we quarter, was X.X% than where significantly It we down

your impact of sustainable second it it's what midsized that has not is, with the a inflation But for particular, question, them. reflection are operators that isn't. and it facing is that the them. To clearly category is the and in challenges smaller on tobacco

their their XX% If at you probably look cigarettes. is is, mix XX% to mix what

They're They mode underperforms going like the that in their a to have operating it material that's on or has have last right a now. And quarter don't survival choice. when so in P&L. category two, impact

term, to those long higher that sacrifice that gallons it. taking term trying work not if in to sustainable. they're so get willing that's short margin is the the And -- And in to can you're and survive,

don't we position. lot as people benefit label to we others. sell that We're the to keeping in from tobacco of Foods Prepared because the And in the high-margin have that and categories, as not that those private have. a not we're people sell store to exposed traffic others high-margin us, For

the to double-digit keep where balance traffic. we you in So EBITDA, see backwards EBITDA. EBITDA it's for results that are in in us can most to growth that going And keep important had

metric a that of together the or one So working just of work us. these really not algorithm is all our for It's other. things combination makes that

Stephen Bramlage

harder of difficult of out to just maybe one against It's to it in smaller long the just also that line today term, thing to just small the add operators a operators the we us, independent industry it dynamics and part smaller we compete industry there And is see just the Ben, near all I believe changing getting of the opportunities do partially just in because part function just reasonable more business. not harder would discussed. more with the we the -- it's just anytime operators scale anybody of is of the any of consolidation run. of amount trend that but long for exist drive continues don't for so in and and

Benjamin Wood

kind think of Okay. guidance but the pointing calculated we're with towards And I right to and points within in, one EBITDA about And original at way year plan, know you're expectations Have your XX% quarters flat. us that in plan acceleration and discussion I growth plan cadence imply still now of to growth is seemed we it? so X. compared the kind year long-term of X the only to for an your EBITDA originally Great. EBITDA growth Day expecting the long-term above acceleration getting was XX% to the know, the to update, two then that Or Analyst in some range XX% to eventually in changed? X% the

Stephen Bramlage

years started I crack year the first what not a in take reality into saying anything CAGR that has would time. around divine clearly We're we our an the X here of and over be. X% to to X. the X-year it at anticipated than stronger we're that. in period midstream out that off committed I'll would that updating XX% of year is year The

that's some that's the And clearly across margin performance really and good just of operations. fuel some of related,

And the we we Day. the all our start every and longer growth driving had when we as good so equally week, stronger about of we and did for we'll still Investor medium -- of anticipated long-term than prospects take a feel day

Operator

question Katai from next the Our Krisztina line Deutsche of with comes Bank.

Krisztina Katai

On maybe private update calendar on how can you to for around is national you was been share year taking expectations you, the going back? label, to possibility very going which anything starting they has in partners? grocery? joint if And on think share successful for roll to get an planning just start And pricing prices your that with January? curious responding any or Are brand there's Casey's potentially are noticing your that unit in new to I

Darren Rebelez

on I guess, planning. Krisztina, Yes, joint

years last and well that of really we business speak. over process the planning so sessions think partners primary together. And gone and growing up CPG with as We've their have working of in I couple had the are We wrapping our the far. good success ours

of with working final development stages now. enter we the discussions we have all some I so right these And into think that spirit, and good of during really plans

we're depends kind respect talking With and the to. really manufacturing of label, the on private to category the it

growing as category communicate always it's branded as national is goal overall and our label with steal a from not Our with national, grow well to the and category share the products. partners products both to this private we

brands And the we strong XX% In That's unit last chips. chips I've X% The as growth. quarter, had good a used quarter. really quarter the grew in positive a and national in an result example.

Our private units in the XX% label XX% chips and grew quarter.

the to possible success both. and is to it So both have do at

to so that's with for achieve all striving what And of we're is that. this

brand of national respective private manufacturers or label our manufacturers products. cases, some their In also the

front. degrees varying on that of integration have we So

not In terms of low Those inflation but probably to beginning underway, would passed year pricing, calendar we I'm conversations some of the -- year. prepared anticipate around somewhere price. still talk are through about single-digit the being really

Krisztina Katai

them in with walking you. So all quarter, about acceleration for into second of consumer a they your loyalty And opportunities on that this that how the just you business that acquisition the new do is attracting our saw comments low-end the down, organic? around customer to customer follow-up in Or you're quick trading program make Prepared then trade do stay down? your think environment? you some And think of part in you Foods as a sure essentially the

Darren Rebelez

economic environment. Yes. of opportunity in sort I like our here this

Our represent Foods business for tremendous value does Prepared consumers. a really

can You would than two the pie an less sides cost the money it far out to for example. a family whole get take QSR as and to

because fact buy with foods like a again, consumers just -- incremental offer foods normal opposed they're about said, towards the And on there. it's packaged to what value I then choice have to value. is we stores And on pricing, lower opportunity foods the they're based prepared see our making gravitating income new food our prepared guests strong it's the and at a our that to more the attract so to as what that to we're starting

the ability which both see on us highest that operate sides, is it's grow we great the margin to for because business So category we in. that

Operator

line comes with question of John the final Royall from Our JPMorgan.

John Royall

in for but the your top the And adjustments second margin. ingredient costs? to little made looks half range tracking you It Foods. could didn't guidance, one. for Prepared dig on some of some are you're the in your year of expectations adjust costs that So what like ingredient for end of inside you a tailwinds the at guidance you And

And guide a margin. we there assume XH? margin maybe inside like what on that just little So in looks should on second a in anything the come may conservative half

Stephen Bramlage

This is start Steve. I'll with that.

with cheese, locked the on cheese -- second cost Specifically hedged XX% year for costs. start should let's most and that That's biggest gets We're attention. one the say, the the half cheese. obviously input about the of or I

favorable second be to expect would what at prices was the quarter. current in year-over-year, similar that I modestly so And to spot it

year. for cheese of X% XX% strip and rest between favorable somewhere the current for the the based So on

contractual, with commodities on Foods of other proteins, Most lot are not et business input of the the Prepared costs a cetera.

And that for is improvement right first believe than in which a second on the basis. to a will what slow we be it reason was year-over-year just cost don't have so experience modest the different protein a half now, significantly half,

somewhat I similar. think be would that

in of LIFO business. having You've less right? of have that's year, have inflation in we the kind seen specifically in the year-over-year. the first charge, broadly And but of what really had experience the that still We that a we're expense, in half just Prepared function LIFO we've really Foods, pressure

John Royall

the question then $XXX next the my guide, buyback on year. million on And Great. is

opportunistic, You suggests part should going about used the framework. about but buyback maybe guide for a allocation putting forward. the more you we that framework in becoming of it's Can entrenched how year, think, talk little the the maybe a word on capital I think as your just

Stephen Bramlage

-- Yes. think Listen, point well your taken. point a it's I

We It do more gives be flow our just ability back and and the bus capital the on and if us Investor which that Day share the always we couple ROIC, can repurchase You obviously stop is to message we'll last flow us grows continues the cash put first it cash active going as been outstrips to where tried accretively for that's flexibility money. growth, the operating for term, the generate had company folks at the short that into not allocation. and years. it allocate EBITDA to to in of grow around more the

continues capital. level lower. continue And that us well, sure leverage It's to the to cost I'm so down. letting not serves tick up of as get driving necessarily the slowly that

We've ample flexibility got now.

XX pay point. to not the logical to And think, away so this to disciplined term. dividend been that. years dividend, payout going kind trying over walk growth pretty the XX% We're of next XX% share We've I repurchase just We've for medium we stop. around on raised a from in becomes how match row the EBITDA at and ratio a

of allocation like capital sheet the proud pieces the put and repurchase cash of more of and the appropriate have cash all together. we that. share But feels generation you an flow when just simply we're so And available part balance of

be I reinvesting than to over reality going nearly to is more significant I not has growth. not do it couple to that last it of we're into as want think so it's a the years. expectation. set has so And play what the would as But part

Operator

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

Darren Rebelez

Thank and us to All today time join on taking you, the the call. right. thanks for

a this our want to happy a off, and thank new wish team quarter year. we and hard holiday I everyone for work members Before season their all sign

Operator

concludes your you Thank call. This for conference today's participation.

now Everyone, have wonderful day. a disconnect. may You

Casey's General Stores (CASY) 12 Dec 232024 Q2 Earnings call transcript