CASY - Earnings call transcript Q1 2025 | Casey's General Stores, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the First Quarter FY 2025 Casey's General Stores Earnings Conference Call. [Operator Instructions] Please be advised today's conference is being recorded. I would now like to turn the conference over to your speaker today, Brian Johnson, Senior Vice President, Investor Relations and Business Development. Please go ahead.

Brian Johnson

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

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

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

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

call found as the increase said, at on reconciliation GAAP A call over link. be non-GAAP Relations Darren that a now of Darren? results. I to for Investor the of as quarter expense quarter like would well referenced on to the to the can With first our website to detailed this under www.caseys.com our breakdown financial turn discuss measures first operating

Darren Rebelez

good and the everyone. Brian, first moment. excited a morning, discuss in Thanks, quarter to We're results

also Casey's their which First, that however, start we I call. the for want the us forward team the to Fikes look the dedication, I welcoming enabled thank to hard and in fiscal will to team our to strong. later discuss off work and year family,

schools for school to is our team million in Casey's over guests to grateful a raising we in year will members to grants grants by have footprint. children This community. to in nearly funded and in positive allow We're year, see us for our classroom continue As on schools $XXX,XXX and begins, its $X impact projects campaign. this the our proud August donated cash action. Last across to

quarter. prior of Diluted and X% increase $X.XX a from million the company prior increase EPS X% year. EBITDA, $XXX results per let's Now an in the an from of finished million from $XXX discuss the income, net generated increase year. the at in The share, X%

Casey's base. example to store the great dollars while expand The business and able were profit as the another gross of the was quarter first strength we model resiliency of growing

expansion, well store, as prepared food saw by margin innovation and continued category. Merchandise with as Inside the strength General the primarily driven Grocery our we

volume fuel same-store margin and $X.XX team gallons tremendous On doing the fuel with positive combined per side, a the over balancing is margins gallon. with job

performed XX.X%. led Prepared over go of X.X% inside Food cheese favorability quarter Sandwiches and team from with continued Same-store quarter same-store in up basis the year our by each the in as sales and a show share We margin or is the first waste outside margin momentum on or Margin up the modest categories. Inside and details was and average X.X% store. and were some its as our was the and were basis the well. the prior X-year We for credible headwind. fourth an X-year to Hot way stack of now job, of X.X% Bakery that our results plan on Beverage to Dispensed both like comparable stack is an that a offset achievable would I great strategic average X-year to with also doing XX.X% a continue XX.X%. sales a of

the X.X% Same-store to and General alcoholic the both category, an up of basis were We momentum beverages, management. or due Merchandise with and XXX increase in on saw cost goods non-alcoholic stack X-year basis in XX.X%, good sales average an from X.X% prior primarily positive specifically notably margin a approximately of liquor. year, of points Grocery

liquor licenses to a be strategic X,XXX advantage Casey's. Our for continue

per of gallons same-store Fuel, gallon. Fuel with X.X% up For sold $X.XXX a were margin

geographic on We outperform our continue volume. region to

Mid-Continent gallon quarter, in X% that OPIS share the a down As fuel indicating the sold data region shows we are category. in the approximately taking

growth it. and to Our continue and team is a show job Fuel the doing margin tremendous volume announcing results

of fee We just same-store, credit excluding X.X% operating basis. with card increase expenses on prudently managed an a

down identifying Improvement it team Continuous to job same-store were doing hours efficient that a shows is great more X%. areas be labor and Our

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

Stephen Bramlage

It's the of and our $X.X quarter well during Thank $XXX good our also X% inside X.X% very on a sales fuel year-over-year for the hard impacted been the the well I'm sold, XXXX. our as prior X-year increase stores a first lower revenue increase quarter strategic start inside were Total and $X.XX favorably from basis. fiscal partially as billion, the billion, million great operating fuel year a prior solid for you, quarter Darren, year. primarily the Total plan price. Results million higher approximately due the for to very X.X% an in from morning. grateful second by a higher work $XXX year to sales results were gallons an by bode offset for quarter. of or team retail was of more or

Dispensed $X.XX Prepared to the rose million, For an increased Food by and sales by $XX quarter, increase million Beverage and X.X%. General to X.X% of $XXX sales Merchandise and increase $XX Grocery million billion, an of

we lapping million made As the benefit prior a a $X.X reminder, the Rewards related to program an Casey's to we're adjustment year. in one-time

average by Beverage XX points was retail increase the offset $XXX quarter, this X% this X% of in the the price. Retail both sales decline $X.XX a sales ago. In fuel approximately same-store partially was gallons period and a were retail during year points. up in basis Prepared compared as fuel Food an average fuel and price by by to Dispensed approximately gallon quarter million XXX negatively a sold basis in $X.XX impacted margin The

from We million higher approximately by or Beverage points XX higher define Food is gross but and gross of category X% modest margin year. from cheese, of points increase $XXX lower as That's or Inside or a the $XX.X or from amortization. X.X%. last as profit $XX.X of pound XX.X% a as an million inside margin prior profit profit profit was was waste million depreciation gross had but experience Prepared of fuel $XX The sold, basis year XXX gross well up XX.X%, from cost up quarter XX.X%, per in gross of This revenue basis a X.X% was Dispensed of goods excluding year. the $X.XX The headwind Casey's did to million increase profit both in points. prior compared the benefited less margin driven and year. ago. XX on which quarter, pound an $X.XX per basis

down Grocery change the proactive increase Fuel was General quarter margin quarter gallon of The of from prior in the was $X.X goods for was to management. gallon, due $XX.X by points the and million basis benefited XX.X%, the down million prior that's year. from cost $X.XXX year. XXX per and profit Fuel prior primarily the gross margin $X.XX about the same year, Merchandise the from from sale RINs of per an

Total $XX.X prior operating X% growth expected of in due is XXX up X.X% to strong the due performance Approximately hours. operated it including to workers' in increase total X% operating expense, be Same-store partially deal unit to operating acquisition. the insurance related as to than others casualty, by compensation X% in lower was the which wage accounted stores. contributed and previously in of reduction million the we modest the offset the increase. quarter, is than the or were costs expenses approximately we stores year. increase health, Higher were to expense more X% the one-time approximately as for employee property disclosed the expense same-store of Fikes increases rates pertaining Approximately and

That's Depreciation up million prior stores. versus in primarily year, more the due to $XX.X million. operating quarter was $XX.X the

Net funded hand increase we in prior The out Nebraska. Net we of the the year compared versus the in shares benefit was X.X%. an the several prior income ago, quarter. increase year. cash acquisitions year to increase to was XX.X% That's tax that's due income due year in income and effective was of as up to $XXX.X for year, year. $X.X prior quarter was tax reduction a and X.X%. purchased rate $XX.X And versus EBITDA interest prior $XXX.X million recorded up for the one-time XX.X%, million, quarter lower million a was expense to million that $XXX.X to million the the interest of driven the on primarily an compared in have prior by in rate an the was

is On senior make it's in is available our the ratio calculated seamlessly liquidity and $X.X billion, acquisition and us notes given X.Xx. pending to in of we our accordance XX, with of the sheet balance Fikes. Our condition, leverage total ability July had excellent

quarter, by operating purchases of the in property of of activities For cash generating of free cash resulted less billion equipment and million company flow. $XXX the million $XXX $XXX net generated

investments priority, target line the the acquisition shares with in and of maintain our to Directors in leverage pending per is long-term in EBITDA our do to August share, the ROIC Board compares growth $X.XX $XXX meeting, remains the investing dividend repurchase to capital ratio quarterly accretive of million until year. the Xx. primary and with prior allocation of we at At the This generating not expect voted Fikes,

be updating our after store of for not previously store from growth growth to previously are now and until the up with XXX units. that's the We We the disclosed expect fiscal units target. year year, closes communicated Fikes our transaction XXX exception fiscal approximately our guidance

some via transaction remodeling synergies this ensure our projects. can capture expeditiously build from modest make new expected will we current adjustments schedule that to to We the

in million financing. a tax As acquired $XXX a transaction $XXX reminder, of has $X.XXX the a and combination purchase gross be price with a billion the and sheet price cash of through purchase million, transaction Fikes benefits, of external will for financed approximately balance net

The includes $XXX and sales. them convenience $XXX in with XX fuel XXX in of million EBITDA being pro Mississippi. of and includes CEFCO approximately gallons Texas sold, it XXX Florida, generated and performance The adjusted forma of financial Alabama, stores a the $XX in approximately transaction inside remaining million XXXX million.

leverage pro to We in based at closing, our notes. calculation forma our approximately level expect on X.Xx that's and current the leverage reach company's

closing this but to reduce capture. deleveraging through prudent the within of synergy first months quickly will modest and a of approximately combination growth XX We Xx

expense deal expect dollars $X.XX Fikes annual be sales that outlook. quarter both expectation our XX%. In and of by million August range, remain annual cheese incur for range quarter, costs unfavorable be the gallon. as operating associated to within the onetime about CPG results per year same-store with the during versus we transaction. costs and inside follows: total our will second is inclusive prior fuel that Our will were were near as we of certain of follows: several was our the within Current

would to call the now to I back Darren. like turn over

Darren Rebelez

X-year team the our strategic I'd Thanks, plan. and team outstanding thank entire to doing to on a executing fiscal to the Steve. job is start on another strong off Casey's for like the an year, great quarter. We're

of The CEFCO target at with acquisition initial stores. strategic expected is number to to our the XXX then months units. of accomplished least early of the this closing be Fikes of the the and announced plan nearly One of convenience pillars grow is new of XX units,

about in are noted these geography in integrating in the as well highly and excited further South. welcoming Casey's assets family. great a our business the As and Texas team as Fikes the in high-quality We're into strategic we the announcement,

we're stores. raising approximately In our growth addition, target X-year store to XXX

calendar cold-dispensed a $X.XX XXXX was XX% Hot drinks, The is growth. that back up the food We summer the earlier brought launched business. quarter. with Another were drive the strong, to category pillar to outpacing as results continues beverages of popular promotion with accelerate the and the the Sandwich the in plan for approximately in lineup category's fountain growth

Our points Prepared at that the they want. and to to right guests Casey's team create provide craveable continues Foods food innovate products with price

The operational third enhance of efficiency. to pillar our plan strategic is

Our operations Continuous with great store Improvement working delivering is team results.

marked a and in are same-store XXX basis These our the result The reduction over the is hours. points removing the overall consecutive last of impact, first reductions the our scores quarter same operation guest non-value-added from satisfaction this quarter the excited work the We're year. stores. as improved about guest experience with ninth having period on simplifying labor

while gallons gallons I'm with posting a we place. testament and the per side in profit fuel of the to gallon have is balance Growing $X.XX the the tools the above business, cents dollars. ability extremely team's same-store of gross fuel proud On team to

quarter, in on the annual fourth sustainability which released is also July website. our During our we report available

Our making share on journey our our make to more sustainability excited shareholders. with team we're Casey's business, continues sustainable to and progress a become

now take your will We questions.

Operator

from comes question Montani Evercore first with Michael Our Instructions] [Operator ISI.

Michael Montani

Yes.

I ask wanted could. X-part, to a Just if

what and on hedging some dig margin could seeing First, Steve? possible been deeper the to a to it the costs, in front, the we've wanted lately. And margin. prepared consumer I little cheese gross take with health enact second Is on modest just into of underlying pricing quarter your secondly, offset that then I meal of discuss you or to that grocery the was all seeing crosscurrents light hoping of we're

Darren Rebelez

go reminder, a just income. about I'll With and consumer, guests $XX,XXX Steve hedging. Michael. in of let Thanks, about consumer, make I'll as year ahead X/X Yes. the costs cheese to talk the over and our address the a respect

be low And not those to so we consider income.

about is guest in of X/X base our So lower income.

to any the the we're of of with to frequency not They're guest level purchasing same X/X seeing they base, the in behavior. typically. that as continuing -- For come purchasing really behavior have change in essentially and store

changing to they items or habits. but as they in modestly units less previously. are they're than they're in I consumers coming had not lower-income their as their say buy before The purchasing many that had wouldn't frequently opting basket

pretty there's bit So a our base there. good. I'd guest little But in overall, say pressure Michael, of hanging there is

Stephen Bramlage

is Steve. this Michael,

inflation of the Prepared cheese, the on than we're the out obviously to the level here even we hedged store the per cheese Prepared the our we've margin Food in time drive a couple this comfortable of quarter margin fiscal made On little we're on necessarily the really you about the quite point we script on would with second had in about that generating are at think items for do we year, the quarter manage a year. Food. specifically the broadly, remainder se, We when we're I in currently pricing inside first. a gross of question, to margin we're expect requirements of remind price that of of bus we adjustments sure, the remainder a that more per And on trying total the bit But the growth we're in against dollar comfortable profitability with specifically with. and don't profit the have, just

margin price such of more retail business. than continue expect I that the has attention X we're both gives the strength and us, proposition flattered we've overall would individual we value category, the that the goods obviously frankly, on we of management in value It But of to proud product to here. would have the our combined. into inside categories pay in room And more had cost it leaning of quality grocery to either the food prepared much and continue margin, inside side. offer that in

Operator

Raymond with Next question comes from Griffin Bobby James.

Robert Griffin

Another good quarter.

are strong improvements you Dan, story. seeing, bank examples the taking just to for wanted maybe So you I seems newer drop down but it? unpack over of team side I guess, of to and continuous talk think the about success guys bit that to the some the or just a the find maybe we've laundry, the Can little past, savings. the of cash nuggets first, more examples OpEx driving continues in a been I to what's used it move

and of of on curious what is today left So just kind cards is what kind there? the

Darren Rebelez

that's an -- recently, initiative is of things Yes, a Bobby, the manual trips bank things happy some sorts of office, more opportunities and And lot responsible manager of were as lot to. all a take food them production removing digital The the then aren't does team of in to of time. paper is to and efficiently. our the digital great in and where tell with a individual system of accuracy laundry I'd doing manual forward identifying couple of the issues, lot a entering historically just that that to stores. you kitchen accounting like the as were things. and the our a as those that and it and of aren't of and production bigger of operate job more having That's process was in was items kitchen manager into just things now. a what back going implemented And a into store, there the stores paper all lot the as a the planner our But for forecasting significant took

anymore. There's math is by scan managers store print. items, done no done being by The they store does paperwork labels, system being forecasting. So No managers.

teams time more back So that and having to them away spend they work to of the kitchen. a time were that some their with lot in gives that takes on

inventory are the of rest of And a what is the the come kitchens call and see inventory ]. way is with in but and structuring Xs inventory also store quarter. the appropriate, sure in in essentially, it's make footsteps the down was through organizing results initiative ordering not levels accurately. waste you be only to quarter, the we reduce the in to efficient And to in Another kitchen labor the [ supplies savings improved done that some

So well. in not some to line are in the lines of results, OpEx starting margin efforts only as a those of yield the but lot

Robert Griffin

your any Very in you the investments asking just context good. population? When my follow-up. around food That's business, look I'm difference I notable And in the secondly guess, And at seeing place. some pricing the taking geographic for helpful. guess prepared of markets I you are QSR by fears different that are of

in that So QSRs against operate in the the you where of with the markets larger up of we you of little seeing more a population Foods business? know. Are bit performance type named any Prepared the difference go

Darren Rebelez

I the our of are daypart think has lunch I primarily the are reflection difference. that Bobby, point of the had that also you spite any this was lineup a can And that can't What innovation Foods of seeing value the team strongest the Prepared Yes. sandwich I in focused. that those done it's low. sort daypart on lunch price but keeping about, actually quarter. happening QSR, in that say are tell daypart in is offers of we've we a talked lot we And that

that's now, with really So for our of guests. and we've quality in proposition, that the level we're particularly strong a resonating think kitchens producing right got I the value

Operator

comes question Bonnie next Herzog with Sachs. Our from Goldman

Bonnie Herzog

guess, merchandise, sales which, same-store just little we that inside guess, general were sales, just up grocery a especially softer was expecting, grew X.X%. and was growth question X.X%, I maybe had it for I same-store which, but I in on than a

maybe the pressures the some and So in on takes the and given how out changes perceived could store, value the actually there. hoping building being of of more the guys on middle-income is maybe consumer signs And pressure you to any the puts lay maybe just even consumer.

Darren Rebelez

same-store of sure, in perspective. this a things quarter from Yes, couple on Bonnie. There's going sales a

quarter, one just strong first quarter cycling we're year. quarter It from a being our last next really of I the a strongest strongest was our think year the year to ago.

a first that to case. the a was proved So to going in that we be steeper and hill bit going climb of quarter to the be knew little

thing The this of bit little of year. second was anomaly kind a we an experienced that

corresponded the Mega $X X us in one at had we've month those of has XX If months either Powerball Millions stores. lottery. you over traffic months, other only over been look to jackpot negative our and Each had months back in cycling the or positive. billion Every the last that has

the those to recycle And so happened X be over this in X of months this -- just quarter. in

And so lost and lottery you we of to transactions bit little traffic, those softness. a point in when can directly softness we as saw that some of --

product. Now sales lottery know, commissioned as you is a

it our traffic. same-store So that carry it does because But sales. really doesn't we into factor drive

lottery. time, And have softness the Those going And a that attributing so to year, got to additional time. are little dynamic to from things we're we some of we traffic. that to to last time with This enjoy that bit. happen through fight

there's Steve into But don't anything of anomaly. more just like a to seemed go so mentioned, It's cycling August back guidance, annual the systemic. of as feel range we the

value, respect pressure seeing one data just earlier, mentioned or right, that the not to like consumers translate. middle-income on point. you we're give higher-income With I'll I

our you XX%. down fuel was at If look volume fuel, EXX about

that's we higher They'll that fuel on blends see seeing sales expensive. was when more typically X%. sales consumers volume premium X%. that They'll were towards behavior. not And not EXX up almost those pull behavior it's We're they're just gravitate down under back because the more stress. ethanol Our cheaper. Premium are because

at that just think behavior. yet. is lowest into pressure we're But some I So translate impact seeing there sales end, overall, the moderating not just

Bonnie Herzog

if helpful. follow-up a may, I just quick private label. That's question, more maybe just And on Okay.

premium business has the more label value, in same you performing? have little about tiered thinking getting I'm Just out your cetera. on little curious been on to it's guess, lift made progress hear And building store? just still or color whether how I any -- your et more a the more Are a private offering? you,

Darren Rebelez

Yes.

dollar we've we've gross it's been from say units what The private of where historically. about and sales from private been pretty contribution has held profit been much percentage steady or last the for year the label, label so. With I'd

change our will working is But progress. So and we for not team label We're that we're done still the yet, time The a still we're future. private so ready get in that trajectory, here but there. of tearing prime on process -- no that's out in hard not work not-so-distant that offering. on

Stephen Bramlage

And too the in I'd the up point specifically The good in business, XXX just got contribution of add and SKUs, this private Bonnie, of points on probably store label sure, at the of for [ grocery label, margin margin to penetration contributed is we've worth and over overall basis mixing XXX private margin XXX I from ] -- and a the because basis us of has think, that to inside the standpoint. margin points that's grocery work, category. on probably over

Operator

comes question Chuck with next Northcoast from Cerankosky Our Research.

Charles Cerankosky

When at at quarter. Fikes acquisition, other this look of Great you you period deals? be any looking closing will ahead on the

Darren Rebelez

deals. at looking always we're say I'd Chuck, Well,

deals at in just about a So larger from this sheet to path, perspective. looking others, have one that hard we what speaking, if is, going down preclude talking to probably balance really think us practically wouldn't size we're comparable about just from this

capacity amount that of whether to want we be We available take do to it. do It's it. to have on a leverage to

that, have trajectory. little that continue manage aside be on time, us we'll in And to small help growth, back that, the the going organic bit. will stores little we But the to bit. their will on aside to market, But acquisitions a work our deals also always from just the to balance pull And continue in so continue from our do. we're M&A market the and to team be the a you new-to-industry speak. sheet take

to there. be So we continue what's see and will out looking

Charles Cerankosky

Darren, cetera? what CapEx kind update follow-up, a of kitchens, et Fikes to need As will

Stephen Bramlage

with $XXX permitting I'll to answer be up that, $XXX will kind current million million, majority $XXX that Chuck. of kind from over That of years, renovate/retrofit but is them We specifically Fikes true kitchens, our get because timeline, going the X Casey's of CapEx stores of are closing million, in the will X belief. kind the anticipate kitchen to the about to of incremental just them. realistically, end spread

Operator

Deutsche from comes Katai Bank. with Krisztina question next Our

Krisztina Katai

I the adjustments retail you price wanted and general merchandise. took that to ask recent some in of grocery about

are product-wise private to value value, and leveraging label the that do consumers are As that to position help And increasingly you traffic continue how how proposition? Casey's just to today reinforce loyalty stores? program see gravitating growth increasingly towards then pricing positive you

Darren Rebelez

be for Krisztina, sure. trying experiencing those our of Yes, We're themselves. we're by price a to still or mean different going pricing the passed you on. increases on on got prudent I manufacturers increases tobacco things being cost couple quarterly

those we teams pricing do are and Merchandise. had continue our goods. has to been probably to But the on. large, retail we've some As been keep of that the to consistent it our trying merchandising practice, other by of fantastic we couple pass job cost working that action we've with and a on to a There's to taking Grocery categories, pricing pass had candy the some suppliers manage and we've that bulk increases consumer. of That's the cost been our in General particular, in snacks and

point And a years of the lower private is is data were if of just about XX% for look label, only And the impact over COVID since up to Merchandise mixing having that CPI say some XX% our last pricing that over X up that and General is you and I retail. Grocery you, time hit, and period. into

same-store performance And relative think to industry just those our on Some in reflects have that passing others sales being of on we I that consumer. prices is it the conservative the in us visibility to.

Krisztina Katai

some dollar and be geographies have taking know larger a Got of your bit I as store a helpful. to your they're then but in it. just order price more different that competitive. actions one That's pricing follow-up, And peers competition, announced

consumables potentially is And markdowns industry? to going So and if food promotions Casey's, you impact that think how and out how do all? at do in see playing you the

Darren Rebelez

Yes.

they're as I starting some sell. of are lot that, last not that dollar the little taking from we sell on have similar over frankly, have to little aggressive do least think We a We these been they back bit. some retailers perspective. different pull sell categories pack of as sizes, consumers of don't -- a get and sell. taken there concerned items, I'm couple think store years, at price more more a but different about the I things some pinched that other don't usually

pretty of track perform how we performed next of competitors. we some how other when they're businesses well our we're closely to and And really independent So those doing.

sure just difference more our on business, they versus so of given that price, have not to we I'm if a aggressive going that. that the big assortment make get So diversity that's to

Operator

Our Tarlowe question Jefferies. Corey from comes with next

Corey Tarlowe

your I perspective CEFCO get But broader to keen Fikes Darren, on I'm hear largely been you was perspective sort recently? here on in recently seen provide the And M&A? acquisitions the acquisition. why just your it you space, so the and that wholesale we've any in curious other think as for industry. color we've the on can as seeing runway Obviously, you what announced M&A to the of seeing you're much to relates

Darren Rebelez

Corey. Sure, Yes.

a In a I it's variety of were case think CEFCO, well-run of They think a job. is things. great and the I doing Fikes business.

time, that to business of long matter it just a monetize in been on to to just was for a decided family I very and think and the they business. it's They've time having things. simply move business other a

scale is independent going Fikes that businesses think opportunity. that our typically more be to anything than family-owned smaller I there's complicated that. just of industry but largely always And operators, don't comprised So there's like given and

to a it's M&A that ever that's than probably really and store and harder driving just component since on activity lot profitable It's is been mattering we're the the environment ever harder been more is other a convenience scale The just and in. the of good operating run and And business COVID. challenging simply going has. thing it

And of industry fragmented pressure. so smaller and with the players, nature the are players lot a much of under smaller those

the to look is at to [ decile, gallon we now. If breakeven closer industry cents right a ] a at $X.XX bottom according a $X.XX breakevens gallon per And MAX, gallon. it's

have who to perspective ability businesses. the and integrate So struggling the great like that capacity folks to there's really operators of survive, an M&A that just out opportunity there creates for and are those lot us from a acquire and a

Corey Tarlowe

helpful. inflation you've seen perspective know mentioned wanted very that a you wage I well. what inflation about a expect just Curious moderate to if I wage perspective as And hours. reduction yet continued labor, and forward. That's in, I some And to believe, ask go then as from labor your there Great. on you've we

Stephen Bramlage

obviously, wage consistent we our when Corey, inflation experience, this is period running of across much to that agree COVID Steve. that, And think We're I'll drove rate would of X% that that try historical I footprint one. with is all our higher. number time, excluding the now. kind X%

for jobs training improved would people, portion turnover that to it we applications, less the to element stores, environment. of like labor of benefiting we feels make bit friendlier sure, the over but as to as little simplification normal better turnover the markets easier in certainly fewer through has all We're a well. rate improvement more of all us Generally, for and there's and wage rolls So of stores attribute generally the generally the costs benefits have those openings. in time a an large from kinds there's store more initiatives, less because for a

So rate X% that impending wage kind to this geography we X% from change at of increase point. any don't our in see

Operator

question Research. Short comes from Our with Karen next Melius

Unknown Analyst

Bacon on This is for [ Jacob ] Phillips Karen.

just X questions. have So we

then how fuel the cheese fold in into Foods been can is on you any color the the Any supply the pipeline upstream on give will on update is business? And first used Fikes Prepared pounds or give update chain. the you've developing and capabilities and can team of second that? The you maybe

Darren Rebelez

the go again take I'll question? fuel say ahead Yes, Can you the supply. and second

Unknown Analyst

in Prepared of you Foods pounds business use? on the cheese that Update

Darren Rebelez

according supply, We took to to what Yes, of supply fuel we a steps report everything on that the went said the it and call ship it happy execute we had did into that our, honest in first We where be upstream pipe X.X, and would begin with begin we completely to the supply to Okay, into chain on buy products that that dedicated further thanks. plan did. make baby Fuel space. quarter. we sure to

into continuing we're So to capability. that grow

have a exciting been the this this or team they XX Fikes is so doing who's One for transaction that comes terminal, fuel years. a of the and about things with

a area So asset we in and different leverage acquiring some this our benefit. we're can expertise actually that to

pick Fikes the with will up the Steve, So that additional we benefit transaction, very talk... excited about

Stephen Bramlage

consume business. cheese, the we cheese Foods commodity Prepared Just for that is largest single in our

to count that. folks also that I year offset with goes up familiar up, are the think most manage little for XX million obviously some waste we're but last pounds as in to trying We used goes that. of over a store of perspective fiscal cheese

total for $XXX fiscal a the And over on spent so little cheese year in we in last perspective. aggregate some on million

Operator

Our from Wells Anthony Fargo. with comes question next Bonadio

Anthony Bonadio

strongly. a of on into want that of rule. on there's if the set know did I possible about some pretty But to to how sort business ultimately maybe effect Labor the lot you're does and piggybacking But I I just still January. I impact mitigating? continued to step Department has of same-store So your overtime looks thoughts that's about in around, questions. believe labor to go trend OpEx like. what uncertainty thinking ask up know that

Stephen Bramlage

with Yes, I'll Steve. start Anthony, This is maybe that.

million step So that about, dollars a should our current of be members level a team couple pending wage Most de already of impacted for that us. impact have annual above up it at us basis the on would talked in the are minimis an to they've January threshold.

X% X% out would kind course, we the say, had washed increases to all that earlier. our talked be So normal year, certainly first I in would about of wage

Anthony Bonadio

peers. Obviously, That's lot you trends. continue your of in we've to it. seen or guys just then helpful. a Got versus And gallon underperform on outperform what

think the driving maybe driving and what effect store proposition you on more some to how insight maybe the traffic the Just from thoughts pump? about that strong what's halo

Darren Rebelez

on think Yes. being head, hit all equal. you Anthony, things I it the

they think job fuel. on are I approach pricing. team shop having to fuel And to our based going of choose where to a competitive inside you've really think does consistent got I and good guests a on the be offer,

when trust fuel, from get So perspective. going to that they're for know can what they consumers over time, they come pricing to a Casey's

other they around intensely to shop brands. as so with as have And maybe don't some

is you can even the And for trips, the more coming a combine extent store then it And and convenience just added store all. after the makes into it convenient. that that benefit there's offers, other the of to all

about reminder, nonfuel related. And so X/X just a our transactions of as are

sales. our convenient allows in to while us like much stores they're all fuel the And the consistency we they have coming offer. a I are And to when people store capture more just get pricing for becomes to time that So said, need there. that those fuel, it their

Operator

I'd I'm any like back for over not questions. call further turn showing to the any to closing remarks. Darren

Darren Rebelez

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

just team once sign our we all this members Before thank Great to their want quarter. job. hard work again I for off,

Operator

today's presentation. Ladies and gentlemen, this conclude does

a You and disconnect, have may now day. wonderful

Casey's General Stores (CASY) 5 Sep 242025 Q1 Earnings call transcript