Casey's General Stores Q4 2026 Earnings Call Transcript

On Wednesday, Casey's General Stores (NASDAQ:CASY) discussed fourth-quarter financial results during its earnings call. The full transcript is provided below.

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Summary

Casey's General Stores posted a record fiscal 2026 with diluted EPS at $19.16 and net income of $714 million, both up 31% year-over-year.

Total EBITDA reached $1.5 billion, marking a 23% increase, as inside sales grew 10.2% with a 42.2% margin.

The company plans to open 120 stores in fiscal 2027, combining acquisitions and new builds, with EBITDA expected to increase by 8-10% despite tough comps.

Fuel gross profit rose 21% with a margin of 42.6 cents per gallon, bolstered by strategic pricing amid market volatility.

CEO Darren Rebelez highlighted strong community contributions, with over $8 million directed towards strategic giving priorities.

Management expects inside same-store sales to grow 2-5% in fiscal 2027, with operating expenses increasing by 5-7%.

The company completed a successful three-year strategic plan, exceeding its goal by adding over 500 new units.

Casey's continues to benefit from structural tailwinds in grocery margins, particularly from nicotine alternatives and energy drinks.

The company expanded its wings offering, showing strong incremental sales and potential to match pizza business in the long term.

Full Transcript

OPERATOR

Good day and thank you for standing by. Welcome to the Caseys General Stores Inc fourth quarter fiscal year 2026 earnings conference call. At this time all participants are in listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised to withdraw your question.

Please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Brian Johnson, Senior Vice President, Investor Relations and Business Development. Please go ahead

Brian Johnson (Senior Vice President, Investor Relations and Business Development)

Good morning and thank you for joining us to discuss the results from our fourth quarter and fiscal year ended April 30, 2026. I am Brian Johnson, Senior Vice President, Investor Relations and Business Development. With me today are Darren Rebelez, Chairman, President, Chief Executive Officer and Steve Bramlage, Chief Financial Officer. Before we begin, I'll remind you that certain statements made by us during this investor call may constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward looking statements include any statements relating to the potential impact of the FIC transaction, expectations for future periods, possible or assumed, future results of operations, financial conditions, liquidity and related sources or needs, the company's supply chain, business and integration strategies, plans and synergies, growth opportunities and performance at our stores. There are a number of known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from any future results expressed or implied by those forward looking statements including, but not limited to the integration of the recent acquisitions, our ability to execute on our Strategic Plan or to realize benefits from the strategic plan, the impact and duration of conflicts in oil producing regions and related governmental actions as well as other risks, uncertainties and factors which are described in our most recent Annual report on Form 10-K and quarterly reports on Form 10-Q is filed with the SEC and available on our website. Any forward looking statements made during this call reflect our current views as of today with respect to future events and Casey's disclaims.

Any intention or obligation to update or revise forward looking statements, whether as a result of new information, future events or otherwise. A reconciliation of non Generally Accepted Accounting Principles (GAAP) to Generally Accepted Accounting Principles (GAAP) financial measures referenced in this call as well as a detailed breakdown of the operating expense increase for the fourth quarter can be found on our website at caseys.com under the Investor Relations link.

With that said, I would now like to turn the call over to Darren to discuss our fourth quarter and fiscal year results.

Darren Rebelez (Chief Executive Officer)

Darren thanks Bryan and good morning everyone. Before we dive into our strong results for the year, I'd like to take a moment to highlight some of the great work Caseys is doing in the communities we serve. Our purpose here is to make life better for our guests and communities every day. It's not just something we say, it's truly something our team members live out every day. This fiscal year, with support of our guests, team members and partners, Casey's contributed more than $8 million toward our strategic giving priorities of education, hunger relief and support for community servants including first responders, military veterans and their families. Through our Cash for Classrooms program, schools and educational organizations across our footprint received 100 grants totaling $1.3 million in support of hunger relief. More than 10 million meals were provided to local food banks. Through our Feeding America campaign and through our work with military nonprofit partners, we helped support more than 2,000 veterans and their families. This impact was made possible because of the dedication of our 50,000 team members, the generosity of our guests and the support of our partners.

All of us here at Casey's are proud of how we keep showing up for our communities and I want to thank everyone who played a role this past year. Now let's discuss the results. For this past fiscal year we had an outstanding fiscal 26 that achieved the highest ever diluted earnings per share, finishing at $19.16 and net income of $714 million, both representing a 31% increase over the prior year. The company also generated nearly $1.5 billion in EBITDA, its highest ever, an increase of 23% from the prior year.

Inside the store growth was impressive. Total Inside sales grew 10.2% during the year while inside same store sales were up 4.2% or 7% on a two year stack basis. Total prepared food and dispensed beverage sales grew 10.2% and same store sales were up 5.2% or 8.8% on a two year stack basis. Total grocery and general merchandise sales were up 10.1% and same store sales grew 3.9% or 6.2% on a two year stack basis. Whole pizzas and non alcoholic beverages helped drive the strong results during the year.

Inside margin expanded 70 basis points year over year to 42.2%. As our merchants have done a tremendous job working with our vendor partners, you get the right products on the shelves while maintaining a strong value proposition for our guests. This remarkable performance inside the store is a testament to our team over the course of the fiscal year we launched successful LTOs, expanded our specialty pizza menu, introduced a new frozen carbonated beverage platform, and finished our wing test and started scaling.

We also partnered with Monster on a red, white and blue razz flavor that was sold almost exclusively at Casey's from late January to early May. This product celebrating America's 250th anniversary resonated extremely well with guests and was a top seller in the energy category throughout the quarter. It also helped raise hundreds of thousands of dollars more Hope For The Warriors and the children of Fallen Patriots Foundation, two causes that we are passionate about here at Casey's at the Pump Fuel gross profit was up 21% with total fuel gallons sold up 10% and fuel margin of averaging 42.6 cents per gallon over the course of the year.

The capabilities of our fuel team has developed over the past several years helped us excel during a time of uncertainty and volatility. Our operations team continues to run the stores efficiently for the year. Same store operating expenses, excluding credit card fees were up only 3.7% for the year, impacted favorably by a reduction of same store labor hours of 0.2%. At the same time, guest satisfaction and team member engagement were at or near all time highs.

As we continue to view operational excellence and store simplification efforts through the lens of our team members and guests, our fiscal 26 results illustrate the durability and strength of Casey's Advantage business model and we're confident in our ability to deliver results in a variety of economic climates. I'd now like to turn the call over to Steve to discuss the fourth quarter and our outlook for fiscal 26.

Steve Bramlage (Chief Financial Officer)

Steve, thank you Darren and good morning. Prior to going over the financials, I'd also like to thank the team for their hard work and their dedication throughout the year. The incredible financial results for the quarter and the full year are a function of the entire organization working together and executing at a very high level. The results that we is delivering is not easy to achieve. Now onto the great financial figures for the fourth quarter.

Diluted earnings per share was $4.37. That is a 66% increase from the prior year. Total inside sales rose 7.4% from the prior year to over $1.5 billion with an average margin of 42.4% which resulted in total inside gross profit dollars, up $61 million or 10.5% from the prior year. Total prepared food and dispensed beverage sales rose by $36 million to $428 million. That's an increase of 9.2% and total grocery and general merchandise sales increased by $68 million to $1.09 billion, an increase of 6.7%.

Same store prepared food and dispensed beverage sales were up 6.6% for the quarter. The average margin for the quarter was 59.5%. That's up 170 basis points from a year ago. Whole pizzas and appetizers and sides performed well in the quarter. Improved waste was the primary driver of margin improvement and a lower lifo charge also favorably impacted margins. Cheese costs were down $0.06 per pound from the prior year to $2.00 even, which had an approximate 15 basis point benefit to margin.

Same store grocery and general merchandise sales were up 5.1% and the average margin was 35.7%. That's an increase of 90 basis points from the same period last year. Sales were particularly strong in non alcoholic beverages, specifically energy drinks. Margin expansion was primarily driven by cost of goods management, while product mix, notably nicotine and nicotine alternatives also had a favorable impact during the fourth quarter. Same store fuel gallons sold were up 1.5% with a fuel margin of 46.9 cents per gallon. That is up approximately 9.3 cents per gallon gallon compared to the prior year. Retail fuel sales were up $$446 million in the fourth quarter due primarily to a 14.1% increase in the average retail price from $2.98 to $3.40, along with a 3.6% increase in the total gallons sold to 848 million gallons, which also contributed we believe the flywheel of our unparalleled inside offering paired with competitive fuel prices is helping our comps both at the pump and inside the store.

Total operating expenses were up 10.1% or $67 million in the fourth quarter. Approximately 2% of the total OpEx increase is due to operating 40 more stores than in the prior year. Same store employee expense accounted for approximately 1 1/2% of the increase due primarily to increases in labor rates as same store labor hours were roughly flat. Same store credit card fees contributed approximately 1% of the increase due to the higher retail prices of fuel.

Higher performance based variable incentive compensation and discretionary charitable contributions contributed to approximately 4% of the increase. Net interest expense in the quarter was $21.7 million. That's down $6 million from the prior year. Depreciation in the quarter was $115.5 million and that's up 8.1 million versus prior year primarily due to operating more stores. The effective tax rate for the quarter was 23.7% compared to 23% in prior year and that's due to an increase in unfavorable permanent differences.

Net income was up versus the prior year to $162.7 million. That is an increase of 65.5%. EBITDA for the quarter was $350.3 million, an increase of 33.2%. Our balance sheet remains in excellent condition and we have ample financial flexibility. On April 30 we had total available liquidity of $1.4 billion. Also, our debt to EBITDA ratio is calculated under the terms of our credit facilities was one and a half times. For the quarter, net cash generated by operating activities of $398 million less purchases of property, plant, and equipment (PPE) of 191 million resulted in the company generating 207 million in free cash flow. This brought our total free cash flow generation for the fiscal year to $722 million. This is inclusive of an approximate $100 million cash tax benefit related to capital spending over the course of the fiscal year.

From the one big beautiful bill Return on invested capital for the fiscal year finished at 12.7%. That's up 120 basis points from the prior year and this represents the highest return on invested capital achieved since a tax aided 2018. At the June meeting, the Board of Directors voted to increase the dividend to $0.65 per share. That is a 14% increase, marking the 27th consecutive year that the dividend has been increased. During the quarter we repurchased approximately $63 million of shares and the Board also expanded the existing share repurchase program up to a total amount of $1 billion.

We anticipate approximately 200 million in share repurchases in fiscal 27 and furthermore, we're providing an outlook as follows for fiscal 27 the company expects inside same store sales to increase 2 to 5% with an inside margin above 42%. The company expects same store fuel gallons sold to be between negative 1 to positive 1%. Total operating expenses are expected to increase approximately 5 to 7% and the company expects EBITDA to increase between 8 to 10% which would imply a 35% increase on a two year stack basis.

At the midpoint of the range, we expect to open at least 120 stores in fiscal 2027 through an even mix of M and A and new store construction. Net interest expense is expected to be approximately $95 million. depreciation and amortization (D&A) is expected to be approximately $490 million and the purchase of PP and E is expected to be approximately $800 million. Please note this is inclusive of the cost of converting the majority of the SEFCO stores to Casey's. The tax rate is expected to be approximately 24 to 26% for the year now, consistent with our prior practice, we are not guiding to a fuel margin CPG nor are we providing earnings per share. However, for modeling purposes only, the FY27 EBITDA outlook is based on a mid-40s cents per gallon fuel margin combined with the other points of guidance. Our May experience was as inside same store sales, same store gallons sold and fuel CPG margin are all consistent with achieving the annual guidance. Current cheese costs are modestly favorable versus the prior year and we expect first quarter operating expense to be up high single digits partially attributable to higher credit card fees due to the higher retail prices of fuel. With that, I'll turn the call back over to Darren.

Darren Rebelez (Chief Executive Officer)

Thanks Steve. I would like to again express my gratitude and congratulate the entire Casey's team for delivering another record year. Their hard work and dedication executing our three year strategic plan was impressive and it showed up in our exceptional financial results. In June of 2023, we laid out a plan that had three accelerate the food business, grow the number of units and enhance operational efficiency. We've now completed that plan and I'm extremely proud of the growth of the organization as well as meeting and exceeding our financial goals.

Over the course of the plan, we added thin crust pizza, several pizza ltos, including three regional offerings and an expanded specialty pizza menu. In addition to pizza, we revamped our hot sandwich lineup, created a new fryer platform with sauce wings and crispy fries, and launched two new beverage platforms with Darn Good Coffee and our frozen carbonated product Frostbite.. For this summer. We recently brought back a familiar favorite bacon cheeseburger pizza and made it even better by pairing it with Casey's Fries and our sauced wings were sold at nearly 850 stores by the end of the fourth quarter.

Despite lapping our largest store growth year in company history. In fiscal 2025, we opened 80 stores with 40 acquisitions and 40 new builds. In fiscal 2026, we were able to do this while converting 50 CEFCO stores to Casey's, bringing our synergies to those sites. This brought our three year total to over 500 new units which well exceeded our original 350 unit goal.. While adding and remodeling a substantial number of stores, we continued our commitment to operating the business more efficiently through continuous improvement.

We have done a great job identifying opportunity areas to make the stores more efficient while improving overall guest satisfaction with strong team member engagement. Over the course of the past three years, we reduced same store labor hours by approximately 5% while also improving turnover by more than 70 percentage points. As we closed out our three year strategic plan, I want to reiterate how proud I am of the work we've accomplished and grateful for the amazing team we have in place.

On behalf of the Casey's team, we're all excited to share with you our plan for the next three years on June 24 in New York City. We love the hand we're holding. We look forward to continuing the momentum. With that, we will now take your questions.

OPERATOR

Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11. Again we ask that you please limit yourself to one question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Bobby Griffin from Raymond James with Raymond James. Your line is now open.

Bobby Griffin

Hey guys, thanks for taking the questions and congrats on capping off an impressive three year plan. Darren and team My first question, Darren is on the fuel side of the business and more of a high level question just has in your view as the historical relationship we're used to between higher RBOB prices and higher oil prices and fuel margin compression just broken down more over the last call it a few years and I guess I'm just asking this in the context that in the quarter RBOB went up over $1.50 and you guys still reported the highest record cents per gallon (CPG) margin in Casey's history.

And even when you look back first that time of Russia, Ukraine, it still was materially better of out-sized gains. So just any thoughts there on have the dynamics in the industry and the cost pressures just changed a relationship that maybe us on Wall street were kind of used to being a little bit more firm with higher oil versus compression cpg?

Darren Rebelez (Chief Executive Officer)

Yeah Bobby, it's a good question. I don't know that it's fundamentally changed for the industry. I do think it did play out a little bit differently this quarter than maybe we've experienced historically. And what I mean by that is there's a lot of volatility in that path from where we started when the conflict started up to today. And so it wasn't a smooth increase going up like we've experienced before. There's a lot of choppiness And I think generally speaking, you know, as a retailer, we don't like to change those prices as frequently as maybe the dynamics on the ground or the wholesale cost was changing. And so when you hold those prices somewhat flat and then it drops for a little bit, you make some. Your margin widens out for a moment in time and then spikes back up and it gets compressed.

So I think it was just a little bit more volatile on the way up relative to the experience we had in the past. And that enabled us to capture a bit more margin than we might have otherwise done.

OPERATOR

Thank you. Our next question comes from the line of Christina Katai from Deutsche Bank with Deutsche Bank. Your line is now open.

Christina Katai

Hi, good morning and congrats on a really strong finish to the year. I wanted to ask you guys, on the inside, margin progression, right when we look at prepared food margin, it was, I think, the best margin in five years, that you have seen. Also on the grocery side, we continue to see really strong performance. So wanting to get your views on how do you view the durability of that, like how much of what you were seeing in the fourth quarter is repeatable.

And I know on the prepared food side you said reduced waste was the biggest driver. So can you just speak to how much opportunity there is still from an extinction perspective? And then just on the grocery side, like, how are you guys viewing volume versus price, if you could touch on those dynamics. Thank you.

Steve Bramlage (Chief Financial Officer)

Yeah, good morning, Christina,, this is Steve. I'll maybe take a shot at that.. I think broadly on margins, there are clearly some structural tailwinds that are helping us that we would expect to continue certainly on the grocery side of the business if I start there. Right. We mentioned now for more than several quarters the mix shift that is benefiting us in the grocery categories. Nicotine is probably the single biggest contributor to that. So as combustible cigarettes generally continue to decline as a portion of that mix replaced by nicotine alternatives, that is a very accretive margin switch for us and for frankly, any retailer, you know, our position of having leaned in early and disproportionately with some of the changes we made in our back-bar planograms and creating more space for nicotine alternatives and shrinking space for cigarettes for the first time, time really ever has given us, I think, a structural advantage in the marketing of those products. And so I do think that is going to continue to accrete for us generally, you know, to, to a lesser extent, but still real, the, the shift within the non alcoholic beverage category.

So energy drinks have been the Star performer for us for a while. And that part of the store and those are a higher margin category than other things in that non alcoholic category. And so as they continue to outperform, that will also naturally accrete up. Finally within the center store and grocery, our investment in our liquor assortment and the footprint and the competitive advantage we have with I think over 1500 liquor licenses, you know, allow us to have a much broader assortment in that category.

And within the alcohol category writ large, liquor is the, is going to be margin accretive for us certainly relative to beer. So we feel good about structural tailwind on the grocery side of the business. And you know, the prepared food side of the business is more commodity oriented. Right. So we're a little bit more subject to what's happening in the market. And so certainly the fall in cheese costs was a modest benefit for us this year that, you know, that can give and take away equally.

The waste progress we've made has very much been self help. I think we feel we have more opportunity there. But prepared food is going to be more sensitive to commodity cycles. And certainly as we continue to lean into new products in there and mix that category a little differently as wings grow and pizza velocity accelerates, certainly pizza velocity will be accretive to that category also.

OPERATOR

Thank you. Our next question comes from the line of Edward Kelly from Wells Fargo with Wells Fargo. Your line is now open.

Darren Rebelez (Chief Executive Officer)

Hi, good morning. And May Adnai congrats to a great quarter. I wanted to ask you about momentum in the business and the cadence and what you're seeing from the consumer. Obviously gallons and inside sales were strong despite higher gas prices. But can you talk about the cadence there? What you saw as you got into April, Maybe more color around May. I'm just kind of curious if consumer behavior has really started to change at all related to this. And then more specifically you gave a little bit of color around May. I'm just curious if you could maybe expand upon how you were thinking about the guidance for the the year in terms of the inside sales guide and the range, which I know is more typical for you, but I'm just curious as to sort of what the puts and takes were around that range.

Steve Bramlage (Chief Financial Officer)

Thank you. Yeah, I'll go ahead and talk a little bit about consumer. I'll let Steve talk about guidance with respect to the consumer. I would say overall, I think consumers are hanging in there. They're, they're probably being a little more discerning about where they shop and how they spend their money. But we're seeing growth across all all of the income cohorts and the way we look at that is below $50,000 a year in income is a low income. 50 to 100,000 a year is mid and above 100,000 is higher income.

And I'd say that all three we're seeing growth a little bit less. So in the lower income, the other two cohorts, which is three quarters of our guest base, are spending comparably to what they've been spending on in terms of specific behaviors. Really, we're not seeing a lot of change on the inside of the store. We are seeing some change in fuel, but it's very minor. And it's all the things that we always talk about. If fuel prices get high, we start to see premium sales dip a little bit.

We see sales of ethanol blended fuel go up because it's a little cheaper. We see gallons per transaction drop a little bit. We see fuel transactions themselves go up because people are coming more frequently. So all those dynamics are happening right now, but in low single digit percentages. So this is kind of very nuanced behaviors. The one thing that is a little bit new that we've seen is the gallons redeemed through our Casey's rewards program were up 23% in the quarter.

So people are clearly seeing value in our rewards program and leveraging those points to take some cents off a gallon for fuel. And that's making that fuel value proposition even stronger for Casey's and our guests. So, Steve, I'll let you talk about the guidance. I think when we put the guidance out there, we're trying to provide a range at least as it relates to the inside and outside volumes where we feel we have really good prospects to land in the middle of that range for the course of the year.

And so within May, specifically what we saw in May makes us feel very good about our ability to land in the middle of that annual range. So I think it's very consistent. And cpg, we provide the modeling guide to cpg. Just sanity check everybody on what it takes to get within that range. And clearly the margins broadly in the industry are strong at the moment. And so we feel good about our ability to achieve kind of that modeled number that's required to give the EBITDA range.

The one thing I would point out, if you just think of sequencing right, the, the strength of the fourth quarter CPG number is great right now. It's obviously a difficult comp when we get to the fourth quarter of FY27. And so we are taking that into account as we kind of think of sequencing so we're strong CPGs as we sit here today, not necessarily assuming we will have equally strong year over year CPGs in the fourth quarter just because of the way the conflict has impacted things.

Thank you. Our next question comes from the line of Jacob Aiken Phillips with Melius Research. Your line is now open.

OPERATOR

Hey, good morning and congrats on the

Jacob Aiken Phillips

strong quarter and the strong results overall. I wanted to ask about wings as you rolled it out more broadly, are you seeing that same incrementality across those markets as you did in early test stores? And does it vary in any way by geography, store format, date, part, etc.

Darren Rebelez (Chief Executive Officer)

Yeah, Jacob, broadly speaking, the wings that performed very well for us so far. You know, again, it's very early stages. We were rolling out a lot of stores in the fourth quarter. So, you know, hard to, hard to pin down a lot of results to the overall P and L just from that one area. From a geographic standpoint, these are all being supplied out of our Ankeny distribution center. So within that geographic range is where this, where all the wing stores are.

So it's pretty comparable geography. So not. There's always a little bit of nuance between DMAs, but for the most part fairly consistent. What we're really happy about was the goal was to, to try to create an incremental occasion per week, so to speak, and where you could get pizza and wings if you wanted to, but you could also the wings were good enough that they could stand alone as a separate order. And we are seeing some of that. We're definitely seeing nice attachment with pizza, but we're also seeing guests order on their own.

And when what happens is when a guest orders wings on their own, they have increased their prepared food order frequency by 30%. So that's a really good fact pattern for us. We really like to see that trend and we'll continue to try to reinforce that and grow that, but we're seeing the incrementality there. Our pizza volume, whole pizza volume where we're selling wings, is still up high single digits. So it is certainly not cannibalized at all. And it is adding a different occasion for our guests.

OPERATOR

Thank you. Our next question comes from the line of Poran Sharma from Steven Zink with Steven Zink. Your line is now open.

Poran Sharma

Good morning and thanks for the question and congrats on posting extremely robust results here. I just wanted to maybe understand how you guys were thinking about approaching that $5 level in retail gas prices. I think on the last call you mentioned that there were some specific actions that you may take if you get to that level. It seems like we're ticking closer to that level than we were on the last call. So maybe just wanted to get a broader update on just how you're feeling there.

And then if you could also provide an update on how. On your hedging, your hedging your cheese costs.

Darren Rebelez (Chief Executive Officer)

Yeah. For aman, with respect to the retail price of fuel, we have historically started to see a little bit of demand destruction when you get closer to that $5 a gallon range. We're sitting around the $4.20-ish average retail price right now. So we still have a ways to go. And when we look back to the beginning of the Ukraine, Russia war, if you take on inflation adjusted basis, we're about a dollar per gallon lower today as we sit here today than we were at the peak during that conflict.

So I think we still have quite a ways to go before we start to get to where we might see some demand destruction. And again, we start to see that you see some of those consumer behaviors. I'm not sure that there's much that we would do on our side to change the play we're running. We tend to price at the lower end of the competitive set as it is. And so we would certainly strive to maintain that posture in the marketplace. And we think ultimately in a higher price environment that accrues to our benefit as we get more people coming to our stores versus somewhere else.

But that's about all we would plan to do on the fuel side.

OPERATOR

Thank you. Our next question comes from the line of Chuck Sarankoski with Gordon Haskett with Gordon Haskett. Your line is now open.

Chuck Sarankoski

Thanks a lot. Good morning. Congrats on store growth. Can you speak to the decision to

Darren Rebelez (Chief Executive Officer)

accelerate growth and I guess how this speaks to the acquisition opportunities that are out there and your opportunities to continue to consolidate stores.

Steve Bramlage (Chief Financial Officer)

Yeah, Chuck. I'll talk about the store growth for this year and let Steve talk about M and A opportunities. You know, this, I guess I would wouldn't necessarily characterize our target for this year as so much an acceleration over the course of time as it is an acceleration just versus prior year. And you know, typically our growth algorithm will call for about 4% new units every year. That that's what 120 new units gets us is right around that 4% range.

It is an acceleration from last year. But last year, remember, we had just acquired the CEFCO chain and so we are integrating that business and so we pulled back a little bit on new store growth to give our team a chance to absorb the CEFCO acquisition and start working on the remodel. So this is really more a timing and sequencing thing. So I would say the guidance for store growth for this year is much more getting back on track from a historic standpoint and really more consistent with our growth algorithm.

And as it relates to just forward

OPERATOR

visibility around kind of the M and A environment, I think we feel very bullish on it. I know we feel very bullish on it. As you know, there is a very long tail of small players in the industry. The majority of stores in the industry are owned by small players, and a lot of those are under significant operational pressure beyond just kind of normal course generational change. And so I think, you know, the outreach that Brian leads for us here, I think we're contacting and having more conversations than we ever had. I think there's a lot of receptivity to what Casey's can bring to an owner of a business as a steward of that business going forward.

And I think we feel highly confident and broadly speaking, what's happening in the industry from a consolidation standpoint, prospectively, and certainly our ability to play, you know, play a role and continuing to pursue those opportunities in a way that makes

Bonnie Herzog

sense for us and our shareholders.

Steve Bramlage (Chief Financial Officer)

Thank you. Our next question comes from the line of Bonnie Herzog with Goldman Sachs. Your line is now open.

OPERATOR

All right, thank you. Good morning, everyone. I just had, I guess, a question on your EBITDA guidance this year. Your 8 to 10% growth expectation is quite impressive. So hoping to hear what gives you the confidence to be able to generate this growth, especially considering the tough comps from last year. And then what are the key drivers of this growth between fuel and inside performance? And I guess what might drive upside to guidance as well as, you know, what could possibly cause you to fall short of guidance. Thanks.

Corey Tarlow

Good morning, Bonnie.

Darren Rebelez (Chief Executive Officer)

I'll take a crack at that. Appreciate you acknowledging it. We know that, listen, it's a big

OPERATOR

number on an absolute basis. We are very sensitive to that reality. And the strong finish to the fourth quarter makes the absolute numbers a little bit bigger. But fundamentally, our mousetrap, we are highly

Irene Nadel

confident that mousetrap continues to work, and

Darren Rebelez (Chief Executive Officer)

we believe it is strategically differentiated. And so our algorithm for this business generally is that half of our EBITDA growth is going to come from what we would call the mothership, and half is going to come from new units. The prior question we addressed our confidence

OPERATOR

in new unit contribution, both building and buying them.

Mark Cardin

So we feel very good about the

Darren Rebelez (Chief Executive Officer)

120 units and about the flow through

OPERATOR

of the new units we've added in fiscal 26. And then from a mothership perspective. Right. The strength that we addressed earlier, just the inside store performance, the margin tailwinds that we have broadly in the store and the differentiated offer that we have

Chuck Sarankoski

both in grocery and prepared food, the

Steve Bramlage (Chief Financial Officer)

velocity we've had in the units and just with the platform expansion into wings, specifically on prepared food and a lot

OPERATOR

of the momentum on pizza.

Tom Palmer

You know, if we need 4% EBITDA growth from the mothership, I think between the grocery business and the margin accretion and the assortment that we have, and just the platform expansion and the velocity on the prepared food business, we feel

Steve Bramlage (Chief Financial Officer)

really good that there's a path that

OPERATOR

is largely within our control to land

Mike Montani

us to that 8 to 10%.

Darren Rebelez (Chief Executive Officer)

Thank you. Our next question comes from the line of Corey Tarlow with Jefferies. Your line is now open.

OPERATOR

Great, thanks. The inside sales have been particularly strong. But I wanted to just double click on a question that was asked earlier around chicken wings. Could you just provide a little bit more context around

Darren Rebelez (Chief Executive Officer)

this can be in terms of percentage of preferred food sales or dollar per box or comp lift or maybe margin just to give us some flavor for, no pun intended, for how to think about the ultimate potential of this initiative. And then, Steve, just a follow up on the OPEX guide. I think you said for Q1 is up high singles and that includes credit card fees and seemingly that doesn't go away. But then the full year guide I think is five to seven. So could you just describe that dynamic as well? Thanks so much.

OPERATOR

Yeah. Corey, I'll talk about the sales and wings, you know, still very early stages to determine the whole potential for wings. And we really haven't given any numbers. But you know, ultimately as we think about long term, and I want to emphasize this, this is a long term comment, so don't go baking it in any models, Corey. But you know, we think this has the potential to be the size of the pizza business, frankly, now that, you know, it took us 40 years to get to where we are today in pizza. So it's going to take us some time to continue to build that credibility. But everything we're seeing right now would suggest that this can be an incremental occasion, that it's good enough to stand on its own.

And what I tell you is even in our Des Moines DMA where we've had it for over a year, we're comping at a 20% growth rate year over year from the launch. So we think there's still a lot of upside there. We still have two more years of just rolling it out across the system before we get fully scaled. And once we're fully scaled and we'll probably be able to do a little more from a marketing perspective to continue to drive the business. So not really prepared to give a number today, but suffice to say, we have a lot of confidence in, in the team and the plan and the upside potential for the. For that part of the business.

Kelly Bonilla

Thank you. Our next question comes from the line of Irene Nadel with RBC Capital Markets. Your line is now open.

Steve Bramlage (Chief Financial Officer)

Thanks and good morning, everyone. And let me just add my congratulations to the chorus. A couple of questions. First of all, I think you mentioned that you're going to complete the conversion at the CEFCO stores this year. So Guest, first question is how should we kind of be thinking about the cadence of lift in, I guess, you know, inside store sales, you know, as. And once that's completed and then just follow up question on something you just said about wings over the long term. Should we be thinking about wings as kind of, you know, having multidimensional offerings over time in the same way that pizza us, for example? So again, like how that could scale up over. Over time. Thank you.

OPERATOR

Yeah. Irene, with respect to the CEFCO remodels, yeah. We said that we would be largely complete by the end of this fiscal year, and we are still on track to do that. The team's doing a fantastic job getting those remodels underway. What I tell you is it's a little bit choppy in terms of trying to model the impact for those. What I can tell you is post remodel, what we've experienced so far in the 50 ish stores that are remodeled is that they've exceeded our expectations. Now, having said that, as we go into this next phase of remodel, these, these remodels are a little more complicated, a little more involved, where we have to actually build kitchens in the store. So the stores are coming offline or under remodel for four to six weeks.

And so they'll take a dip in performance while that construction is going on. Then they come out the other end and they accelerate. So we'll have close to 130of those stores throughout the fiscal year in varying stages of that. So a little bit tough to say what the overall impact is. Kind of the way I think about it is it's kind of neutral for this year. We don't see a lot of upside, don't see really any downside, but it's a process to get through.

Going into next fiscal year would be when we're largely clean, the remodels will be done and then we should be able to experience some of that upside. So I think we still have a lot of dry powder left with the CEFCO conversions for next fiscal year.

Darren Rebelez (Chief Executive Officer)

Thank you. As a reminder, we ask that you please limit yourself to one question. Our next question comes from the line of Mark Cardin with ubs. Your line is now open.

Thanks so much for taking the question.

So you guys call that the strength in whole pies? Do you think you're seeing much incremental food away from home trade in coming

as a result of fuel price increases? And just how are you thinking about

price gaps in pizza today relative to

the major national chains?

Yeah, Mark, a couple of things on that. We are experiencing some great growth on whole pie and I think it is a combination of the great work our team has done on the innovation front in terms of getting really interesting and unique pizza builds out in the marketplace in conjunction with pulsing in some promotional opportunities to create value for our guests. But by and large, we are priced anywhere from one to three dollars below the national brand competitors on whole pizzas. And that's, you know, that tends towards the $3 range, not so much the $1 range. Overall, if you look in this past year, the top four pizza chains that we track, they've taken about two and a half percent in price this year.

This past year we haven't taken any and we haven't taken any for a couple of years while they have continued to do that. So I think that value proposition is just that much stronger for us right now with respect to high gas prices. I do think it's interesting because there's been a narrative that pizza velocity in the industry is under pressure because of high gas prices. But we have fuel pumps in front of all of our stores with a big price sign.

It flashes what the gas price is and our pizza business is up about 10% year over year. So I'm not sure that there's a strong correlation between gas prices and pizza performance. But suffice it to say, we feel good about our value proposition and it

seems to be resonating with our guests.

Thank you. Our next question comes from the line of Chuck Sarankoski with North Coast Research. Your line is now open.

Good morning, Greg Cord, congratulations.

Question about your closed store How many of those are FICs that

are in the process of being remodeled.

How many will be sold and what

kind of cash might that generate and the other and is how many of those are just going to reopen out of the 41 that aren't FICs?

Yeah, Chuck, I'll take that. So the 41, those are not stores

that are going to reopen. Right. We would have both.

We would consider those permanently divested. You know, some of those are fics. The best example I give you is

the state of Mississippi.

So you know, we, we acquired 10, 10 or so stores I think as part of that total transaction in the state of Mississippi. And you know, upon further review decided that just wasn't the right, right place for us to fly the flag at the moment given that location and the capital returns that we expected. So we did ultimately sell, sell those stores. And so you can see total monetization on the cash flow statement. We got about $42 million last year from you know, largely the sale of those 41 stores. There were some other things in there, but gives you a sense of what the monetization of those were. And there were some other SEFCO stores beyond the Mississippi ones, but there were

also stores from prior acquisitions.

And then, you know, sometimes we will close two old stores when we build a brand new store. So it's a variety of things, but Sefco certainly is contributing there and Mississippi is probably the highest profile decision that we made against those 41.

Thank you. Our next question comes from the line of Tom Palmer with JPMorgan Morgan. Your line is now open.

Good morning. Thanks for the question. I wanted to ask and I know Corey touched on this, but on the OPEX growth running a bit higher to close out the year, it sounds like to start the year than the 5% to 7% growth outlook. When do we start to see OPEX growth taper off? And when we think about the drivers, are there new expense initiatives we should be thinking about versus maybe more mechanical items such as lapping non recurring costs like the elevated incentive comp. Thank you.

Good morning, Tom.

Steve, I'll take that.

So you know the 5 to 7%

for the year, I don't think there's a lot of special new initiatives per se that would be included in that number. You know we tend to run and you know the stores are the majority of our operating expense. I think stores are about 75% of our total opex. And so you know, you're looking at a 4% kind of wage rate increase across the store. Base partially offset by some hours. But by and large you've got 4% in most of your base there.

We will certainly have new units coming

in as well, which would increase that. I think the sequencing in the first

quarter versus the fourth quarter is probably

the most impactful from a modeling standpoint. And so, yes, high credit card fee,

higher credit card fees year over year.

First quarter of this year for sure, because of higher retail. And if you think of what contributed to the higher OPEX print in 4Q26, a lot of that was discretionary or performance based. So 4% of the increase we had in the fourth quarter of 2026 was discretionary charitable contributions and higher performance compensation. And so the planning assumption is right. We go back to the normal course and incentive comp normalizes. We've kind of pre funded a lot of our charitable giving for the next couple of years. And so by the time you get to the fourth quarter, you actually, on a year over year basis would have

a much lower OPEX increase.

And so when you sequence it that

way, you can, you can kind of

land it back in that 5 to 7% range.

Thank you. Our next question comes from the line of Mike Montani with Evercore isi. Your line is now open.

Hi, good morning. Just wanted to ask about two things. One was just a clarification, if I could, in terms of traffic and ticket and how the comp cadence played out throughout the quarter. And then the follow up was around EBITDA synergy realization from CEFCO. Are you guys closer to 20 million or 10 million for this year? And do you still think 40 million plus is attainable kind of over the next two years?

Yeah, Mike, you know, with respect to traffic and ticket, I was really happy with how we performed in the fourth quarter from that perspective. You know, our traffic was up about 3%. Our ticket was up about two and a half. And that's basically what gets you to the five and a half, same store comp. So I feel really good about the balance that we're striking. We're keeping pricing action at a minimum and largely that's taking place in the nicotine category overall. There's a couple of other areas. Candy in particular. It has some price action, virtually none in prepared foods. And we're winning on traffic, which is, I think, the more sustainable way to grow the business. And our team's doing a fantastic job driving traffic to the stores and then building that basket once they get there.

Thank you. Our next question comes from the line of Brad Thomas with KeyBanc Capital Markets. Shirley is now open.

Hi, good morning. Thanks for taking me. Question and great quarter here. I wanted to ask about store growth and different geographies and how you think about the competitive landscape is really the question I wanted to ask. You know, you're moving more into Texas and in Florida. These are not big markets for you today, but obviously have tremendous potential going forward. Wondering if you could just touch on any nuances you're seeing from a competitive standpoint in these or any other markets.

Yeah, sure, Brad. Certainly we're getting into some newer geographies for us, as you mentioned, Texas and Florida in particular. And even as we've expanded our footprint further east into Ohio, Michigan, Kentucky, Tennessee, we start to run into some different competitors. But, you know, overall we face some pretty strong competitors in the. In the geographies we do operate in. In a more concentrated basis and we perform very well there. So we're.

We're very confident that in spite of perhaps a different competitive set than we're accustomed to, we perform very well against really the best in the business. And they do well what they do well, and we do good at what we do good at. And so I think our model's a little bit differentiated versus a lot of theirs, and so we compete pretty favorably. Texas in particular has been a good market for us as we've gotten in there. Florida is a little different.

You know, with us being in the Panhandle. You know, I would probably envision us from a store development standpoint, probably moving more north and west towards the core footprint of our geography, as opposed to south and east towards the heart of Florida from that perspective. But that's how we're looking at it today. We feel very confident in our ability to compete in whatever geography we're operating in.

Thank you. Our next question comes from the line of Kelly Bonilla with BMO Capital Markets. Your line is now open.

Hi. Thanks for fitting me in, and congrats on a strong quarter. Steve, I wanted to just go back to fuel margins a little bit. You talked about it a little bit with respect to your comment on the sequencing there. But I guess I think what sticks out is just clearly how strong the year ended from a fuel margin margin standpoint. And you're still guiding to your algorithm for fiscal 27. And I think you called out a mid-40s CPG, which I guess would call for continued expansion from the 42.6. And so I'm just curious what drives that further increase in CPGs for next year? Is that just given how strong they've already started out. Is there something more structural with what Casey's is doing internally? And do you think that mid-40s is sustainable in future years or could we come off of this kind of elevated environment at some point?

Hey, good morning, Kelly. I'll try to try to address it. So there's, I think there's a lot of things in the bowl, right? So you know, technically we're not guiding the mid-40s, we just are telling you

mid-40s is what makes the math work.

Now, having said that, for sure, we're starting off the year strong, right? The exit from the fourth quarter flatters our ability to achieve that number for the course of the year. We know that we're sensitive to having to lap a really strong number in

the fourth quarter of this fiscal year.

You know, we don't know what the conflict is going to foretell or how that's going to play out. So we're sensitive to that. But structurally, cpd, two things on the structural side, when we do the correlations historically, you know, Covid notwithstanding, CPGs have tended to increase pretty consistently with CPI. And so we do generally feel pretty good about that reality. And so for sure we don't see that necessarily breaking. And secondly, the cost of doing business in the industry for the small players has only gone up and the pressure that they feel across other aspects of the business has also only become more acute. And so for most of the industry,

right, the two thirds that are in chains of 10 stores or less, they

just have a checkbook. They don't have a prepared food business and a grocery business and a fuel business.

They have a checkbook for the store.

They have to pay people the same amount that we have to pay people. They don't have the procurement benefit that we have. They're over indexed on tobacco relative to us. They don't have any ability to scale

or have any kind of a digital platform.

The only thing they can do in the short term to help their situation stay above water is to turn a

lever on fuel margin.

And so it's very difficult, based on the NACS information for the industry, for

us to countenance a resetting for the

industry at a much lower level of CPGs than kind of we see, you

know, right now again, conflict notwithstanding. So you put all of that in the bowl, the structural stuff, the entrance

strength that we have because of the conflict, we feel like that modeling guide that we have is imminently achievable also based on what we know right now.

Thank you. I would now like to hand the conference back over to Darren Rebelos for closing remarks.

All right. Thank you for taking the time to join us on the call today. We look forward to sharing our next three years strategic plan in a couple of weeks. Have a great rest of your day. Thank you.

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