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    CASY
    Earnings call· Oct 2025(Q2 FY26)

    CASEYS GENERAL STORES INC CASY

    Dec 10, 2025 Source

    Executive summary

    Casey's Q2 FY26 — Strong Inside Sales and Fuel Gallon Growth

    Casey's General Stores delivered a strong second quarter, driven by robust inside sales and continued market share gains in fuel. The company's strategic focus on value proposition and innovation, particularly in prepared foods, resonated with guests, leading to increased traffic and higher-margin item purchases. Management remains confident in its operational execution and M&A strategy, while actively managing operating expenses and integrating recent acquisitions.

    Highlights

    5

    • Diluted EPS increased 14% to $5.53 per share.

    • Net income rose 14% to $206 million.

    • EBITDA grew 17.5% to $410 million.

    • Inside same-store sales were up 3.3%, accelerating to 7.5% on a 2-year stack basis.

    • Fuel same-store gallons sold increased 0.8%, outperforming the Mid-Continent region's 2% decline.

    Concerns

    3

    • Prepared food and dispensed beverage margin decreased 10 basis points, primarily due to the lower margin profile of CEFCO stores.

    • Same-store operating expense, excluding credit card fees, increased 4.5% year-over-year.

    • Net interest expense was up $12.1 million to $24.7 million, mainly from financing the Fikes acquisition.

    Guidance & targets

    7
    CategoryTargetConfidence
    Fiscal 2026 EBITDA growth
    15% to 17%
    high materiality
    High
    Inside same-store sales growth
    3% to 4%
    high materiality
    High
    Inside margin
    41% to 42%
    medium materiality
    High
    Effective tax rate
    24% to 25%
    medium materiality
    High
    Total operating expense increase
    8% to 10%
    medium materiality
    High
    Q3 operating expense increase
    mid-single digits
    medium materiality
    High
    Share repurchases
    approximately $200 million
    high materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Inside Store
    Total inside sales increased by $190 million. The 2-year stack for same-store sales accelerated from the first quarter, indicating strong momentum.
    Same-store sales: 3.3%Same-store sales (2-year stack): 7.5%
    		$1.66 billion13%—42.4%
    Prepared Food and Dispensed Beverage
    Sales rose by $50 million. Whole pies and hot sandwiches performed well, with breakfast showing exceptional performance. Margin was impacted by lower margins from CEFCO stores, partially offset by improved waste and cost of goods management.
    Same-store sales: 4.8%Same-store sales (2-year stack): 10.3%Margin change YoY: down 10 bps
    		$468 million12%—58.6%
    Grocery and General Merchandise
    Sales increased by $141 million. Margin improvement was primarily due to a favorable mix shift towards higher-margin items like energy drinks and nicotine alternatives, as well as cost of goods management including manufacturer-funded promotions.
    Same-store sales: 2.7%Same-store sales (2-year stack): 6.4%Margin change YoY: up 40 bps
    		$1.19 billion13.4%—36%
    Fuel
    Retail fuel sales were up $273 million. The increase in gallons sold was partially offset by a 4.8% decline in average retail price. Fuel performance remained robust, supported by premium/mid-grade demand, stable diesel sales, consistent pricing, and gains in fleet volumes. The margin includes an approximately $0.015 per gallon drag from CEFCO stores.
    Same-store gallons sold: 0.8%Average retail price: $2.96 per gallonAverage retail price prior year: $3.11 per gallon
    		$2.85 billion16.8% gallons sold—$0.416 per gallon

    Operational metrics

    30
    Diluted EPS
    $5.53up 14% YoY
    Q2 FY26
    Net income
    $206.3 millionup 14% YoY
    Q2 FY26
    EBITDA
    $410.1 millionup 17.5% YoY
    Q2 FY26
    Total revenue
    $4.51 billionup $559 million or 14.2% YoY
    Q2 FY26

    Primarily due to higher inside sales and fuel gallons sold, partially offset by lower retail fuel price. Also favorably impacted by operating 9% more stores.

    Gross profit
    $1.12 billionup $163 million or 17% YoY
    Q2 FY26

    Driven by both higher inside gross profit and higher fuel gross profit.

    Inside gross profit
    $83.8 millionup 13.5% YoY
    Q2 FY26
    Fuel gross profit
    $65.1 millionup 20.9% YoY
    Q2 FY26
    Other income
    $40.9 millionup $14.2 million or 53.4% YoY
    Q2 FY26

    Primarily due to wholesale fuel gross profit from Fikes acquisition and a one-time benefit from gift card program change.

    Total operating expenses
    16.7%up $101.9 million YoY
    Q2 FY26

    Increase due to unit growth, labor rates, and variable incentive compensation, along with higher insurance, utilities, legal, and advertising costs.

    Net interest expense
    $24.7 millionup $12.1 million YoY
    Q2 FY26

    Primarily from financing the Fikes transaction.

    Depreciation
    $109 millionup $14.6 million YoY
    Q2 FY26

    Primarily due to more stores.

    Effective tax rate
    24.7%nearly comparable to prior year
    Q2 FY26
    Net cash generated by operating activities
    $347 million
    Q2 FY26
    Purchases of PP&E
    $171 million
    Q2 FY26
    Available liquidity
    $1.4 billion
    as of Oct 31, 2025
    Credit facility debt-to-EBITDA ratio
    1.7x
    Q2 FY26
    Quarterly dividend
    $0.57maintained
    Q2 FY26

    Board of Directors voted to maintain the dividend.

    Share buyback
    $31 million
    Q2 FY26

    Repurchased during the second quarter.

    Cheese cost
    $2.11down 6% YoY
    Q2 FY26
    Cheese hedging
    80%
    next 4 quarters

    Locked for the second half of this fiscal year and the first half of fiscal 2027.

    Mid-Continent region fuel gallons sold
    2%decline
    Q2 FY26

    Casey's same-store gallons sold outperformed this regional decline.

    Traffic
    1.5%up
    Q2 FY26

    Increased guest traffic to the stores.

    Whole pie sales
    8%up in units
    Q2 FY26

    Grew faster than the prepared foods category.

    SNAP eligible sales
    less than 2%
    Q2 FY26

    Very low percentage of total sales, indicating minimal impact from government shutdowns.

    Inside same-store sales (2-year stack)
    6.5%
    Q1 FY26

    Reference to prior quarter's performance.

    Fikes acquisition synergies target
    $45 million
    long-term

    Total target for fully synergized EBITDA from Fikes acquisition, with current realization primarily from fuel and SG&A.

    Fikes acquisition fully synergized EBITDA
    $89 million - $90 million
    long-term

    Ultimate target for EBITDA contribution from Fikes once fully synergized.

    Store growth split target
    50-50
    annual

    Planning goal for new store additions, with flexibility to adjust based on M&A activity.

    Store return target
    mid-teens
    after a few years

    Target return for both new-to-industry builds and acquisitions once stores mature.

    Veteran support fundraising
    $1.2 million
    November 2025

    Raised through the annual roundup campaign.

    Industry KPIs

    6
    MetricValueDetails
    Sg a rate4.5%%
    Gross margin drivers42.4%%
    Fuel gas station economics$0.416per gallon
    Warehouse store club count9%%
    Comparable same store sales3.3%%
    Category level comps and inflation deflation6%%

    Product announcements

    3
    ProductTypeDetails
    Maple Waffle breakfast sandwichlaunch
    Thin Crust Thursdays and College Football Saturdays promotionsupdate
    Wingsroadmap

    Deals & partnerships

    1
    FikesAcquisition of convenience stores, now being integrated and rebranded.

    The acquisition is now being lapped, impacting year-over-year comparisons for OpEx and margins. Rebranding of CEFCO stores to Casey's, starting with larger stores with kitchens, will begin in early calendar year to improve margins.

    Risks & headwinds

    4
    CEFCO integration margin dragOngoing until rebranding and integration are complete, starting early calendar year.

    Prepared food and dispensed beverage margin down 10 basis points from prior year, with approximately 130 basis point headwind from CEFCO stores. Grocery and general merchandise margin impacted by CEFCO stores.

    Mitigation: Improved waste and cost of goods management, accretive mix, favorable cheese cost comparison, and future rebranding efforts to Casey's full assortment.

    Increased Operating ExpensesQ2 FY26, with Q3 expected to be up mid-single digits.

    Same-store operating expense, excluding credit card fees, increased 4.5%. Total operating expenses up 16.7% or $101.9 million.

    Mitigation: Maintaining flat same-store labor hours, prudent labor additions for demand, and overall cost management. Full year OpEx expectations unchanged.

    Higher Net Interest ExpenseOngoing.

    Net interest expense was $24.7 million, up $12.1 million versus the prior year.

    Mitigation: Strong earnings and higher cash flows supporting increased share repurchases.

    Commodity Price Volatility (Fuel)Ongoing.

    Fuel market commodity price volatility is 100% out of company's control. November fuel CPG was in the low 40s, but no guarantee for future months.

    Mitigation: Consistent pricing discipline and strong in-store offerings to drive traffic to the pump.

    What to watch in Q3 FY26

    5

    CEFCO Store Rebranding Progress

    Beginning of calendar year (Q3 FY26)
    CurrentRebranding to start early calendar year.
    TargetConversion of larger stores with kitchens underway.

    Why it matters

    Successful rebranding is key to realizing full synergies and improving margins from the acquired stores.

    Now that effort in terms of rebranding will start to kick off in earnest at the beginning of the calendar year. We'll start converting the -- their larger stores that have kitchens in them already.

    Q&A highlights

    6

    Can you discuss the sustainability of fuel outperformance, Q3 margin expectations, and any fundamental changes in your approach or the competitive landscape?

    Management stated their approach to fuel has not changed, focusing on balancing profitability and volume. Outperformance is linked to the strong in-store offer, making their guests less elastic. Seasonally lower margins are expected in Q3 and Q4, consistent with historical trends, but they do not prognosticate beyond November's experience.

    “Our guests, we believe, are a little less elastic than the average guest because they're already coming to the pad for the inside and store offer. So that has certainly helped our outperformance relative to the market that we're in.”

    asked by Ed Kelly · answered by Stephen Bramlage

    2 min read5 chapters

    Detailed Narrative

    01

    Veteran Support Initiative

    Casey's General Stores raised $1.2 million in November for two veteran-focused nonprofits, Children of Fallen Patriots and Hope for The Warriors. This was achieved through its annual roundup campaign, supported by guests, team members, and partners at PepsiCo. The company expressed gratitude for the support shown to the military community.

    02

    CEFCO Integration and Margin Impact

    The acquired CEFCO stores currently operate with lower margins in both prepared foods and grocery/general merchandise compared to Casey's existing stores. This is attributed to them not yet being fully rebranded and integrated. Rebranding efforts, starting with larger stores that already have kitchens, are scheduled to commence in earnest at the beginning of the calendar year, with the expectation that margins will accrete over time⏳ as these stores adopt Casey's full assortment and operational model.

    03

    Fuel Market Share Gains and Strategy

    Casey's continued to gain market share in fuel, with same-store gallons sold increasing 0.8% while the Mid-Continent region experienced an approximate 2% decline. This outperformance is attributed to the company's consistent pricing discipline, robust store offerings, and the strategic advantage of driving guests to the pump through its strong inside store proposition. Management emphasized that their approach to balancing profitability and volume remains unchanged.

    04

    Consumer Behavior and Value Proposition

    Lower absolute fuel prices contribute to increased discretionary income for guests, but the primary driver of in-store success is Casey's strong value proposition, particularly in prepared foods. Consumers are being more discerning with their spending, gravitating towards Casey's for items like specialty pizzas and multi-pack bakery items where quality and value intersect. This strategy has led to increased traffic and higher overall guest satisfaction scores.

    05

    Wings Test Update

    The company is nearing completion of menu refinements and procedural gap closures for its wings offering. New flavor profiles have recently been introduced into an expanded base of test stores for validation. A broader rollout timeline has not yet been announced, but the development work is largely complete, and the company is getting closer to the finish line for this new product.

    AI-generated summary of the company’s earnings call. Not investment advice.