ANKENY, Iowa – Casey’s General Stores reported a 27% increase in first-quarter earnings, driven by prepared food, fuel margins and store growth, though softer same-store sales prompted a sharp investor reaction.
Net income rose 27.1% to $273.7 million for the three months ended July 31, and diluted earnings per share increased 27.7% to $7.37. EBITDA climbed 17.1% to $485.1 million.
Inside same-store sales increased 3.2%, compared with 4.3% growth a year earlier, and were up 7.7% on a two-year stacked basis. Total inside sales increased 5.6% to $1.78 billion, while inside gross profit rose 6.3% to $749.8 million.
Prepared food and beverage continued to lead the business, with same-store sales up 4.8%. Growth was primarily traffic-driven, with minimal pricing, and whole-pizza units increased nearly 10% during the quarter.
“We are off to a great start on our three-year strategic plan, highlighted by a nearly 28% increase in diluted EPS,” said Darren Rebelez, chairman, president and CEO. “Guests are responding well to our compelling value proposition on our high-quality prepared food, especially in whole pies.”
BNP Paribas Equity Research said the inside sales result was more nuanced than the headline figure suggested. Remodels of former CEFCO locations created an estimated 25-basis-point drag on inside same-store sales, the firm said, implying underlying growth of approximately 3.5%.
The firm also highlighted momentum in prepared food. Casey’s said that about 38% of customers who purchased its newer wing offering placed wing-only orders, and those customers subsequently increased their overall prepared-food purchase frequency by about 30%. In the Des Moines market, where wings have been available the longest, wing sales increased 46% year over year.
Casey’s continues to convert stores acquired through its Fikes Wholesale acquisition from the CEFCO banner. The company said that approximately 1% of its store base experienced planned disruption from remodeling during the quarter, while previously converted locations have generated prepared-food increases of more than 30%, according to BNP Paribas.
Inside margin increased by approximately 30 basis points to 42.2%, benefiting from sales mix and cost-of-goods management. Prepared food and dispensed beverage margin increased to 59.3% from 58% a year earlier.
Fuel same-store gallons declined 0.3%, while total gallons increased 2.5% as Casey’s expanded its store base. Fuel gross profit rose 19.6% to $446.9 million, and the fuel margin increased to 47.8 cents per gallon from 41 cents.
Operating expenses increased by 8% to $754.1 million. BNP Paribas noted that labor hours remained nearly flat despite about 4% growth in prepared-food units, indicating continued operating productivity.
Casey’s ended the quarter with 2,959 stores and said it is ahead of schedule with the Fikes integration. The retailer plans to open at least 120 stores in fiscal 2027 through acquisitions and new construction.
The company maintained its fiscal 2027 outlook for same-store sales growth of 2% to 5%, an EBITDA margin above 42%, and EBITDA growth of 8% to 10%.
BNP Paribas maintained its Outperform rating on Casey’s after the results but lowered its price target to $818 from $995. The firm characterized the selloff following the earnings report as more of a valuation reset than a significant deterioration in Casey’s underlying business.
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