Casey's Q1 2027 EPS rises 28% as revenue jumps 24.3%

Casey's General Stores (NASDAQ: CASY ) held its first-quarter earnings conference call on Wednesday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

37, up 28% year-over-year, and net income increasing by 27% to $274 million. The company generated $485 million in EBITDA, marking a 17% increase from the prior year, with significant contributions from prepared food and dispensed beverages. Strategic initiatives include the integration of the FIKES acquisition and remodeling of legacy CEFCO stores, which temporarily impacted same-store sales but are expected to yield long-term benefits. 3% increase driven by higher inside sales and retail fuel prices.

Future outlook remains positive with continued focus on operational efficiency, store remodels, and strategic growth, targeting 120 new store units for the fiscal year. Management emphasized the company's competitive advantage in prepared foods and maintained confidence in ongoing growth and strategic initiatives. Full Transcript OPERATOR Good day, and thank you for standing by. Welcome to the first quarter FY 2027 Casey's General Stores earnings conference call.

At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this 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, Sam James, Senior Vice President, Finance and Investor Relations. Sir, please go ahead.

Sam James, Senior Vice President, Finance and Investor Relations Good morning, and thank you for joining us to discuss the results of our first quarter ended July 31, 2026. My name is Sam James, Senior Vice President, Finance and Investor Relations. With me today are Darren Rebelez, Chairman, President and Chief Executive Officer, and Steve Bramlage, Chief Financial Officer. Before we begin, I will 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 FIKES transaction; expectations of future periods; possible or assumed future results of operations, financial condition, liquidity and related sources or needs; the company's supply chain; business and integration strategies, plans and synergies; growth opportunities; and performance.

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 FIKES acquisition; our ability to execute our strategic plan or realize the synergies from the strategic plan; the impact and duration of conflicts in oil-producing regions and related governmental action; as well as other risks, uncertainties and factors which are described in our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q as 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-GAAP to GAAP financial measures referenced in this call, as well as a detailed breakdown of our operating expense increase for the first quarter, can be found on our website at under the Investor Relations link. With that said, I'd like to turn the call over to Darren to discuss our first quarter results.

Darren Rebelez, Chief Executive Officer Thanks, Sam, and good morning, everyone. Before we go into further detail on our outstanding first quarter performance, I'd like to thank the entire Casey's team for their hard work during our 100 Days of Summer and for the excellent job they did serving our guests. I'm also proud of the positive impact we're making on the communities we serve as students head back to school. Our annual Cash for Classrooms giving campaign raised funds for grants that will support schools, students and teachers.

8 million. That sets a new record and reflects our shared commitment to invest in the future of the communities we call home. We're through the first quarter of our fiscal 2027—2029 three-year strategic plan that we laid out in June, where we highlighted Casey's Advantage Convenience QSR flywheel with our three lines of business under one operating cost structure. Our strong first quarter result is yet another proof point that our Advantage model is working as we continue to gain share both inside and outside the store.

Now let's discuss the results from the quarter. 37 per share, up 28% from the prior year. Net income was $274 million, an increase of 27% from the prior year. The company generated $485 million in EBITDA, 17% higher than the prior year and up 40% on a two-year stack basis.

Inside the store, prepared food and dispensed beverages remained strong. PF and DB transactions were up over 100 basis points, driving PF and DB units up nearly 4% versus the same period in the prior year, as guests continue to gravitate toward our abundant offering, compelling value and continued innovations such as our Bacon Cheeseburger Pizza LTO. Inside margin expansion was driven primarily by prepared food and dispensed beverage mix. In the forecourt, the capabilities we developed over the past couple of years help us navigate a volatile environment.

Fuel margin was nearly 48 cents per gallon while same-store gallons were roughly flat. One note on the quarter: as part of our integration of the FIKES acquisition, approximately 1% of our total store base had a planned disruption associated with remodeling legacy CEFCO stores to Casey's. As a result, same-store sales both inside and outside the store faced a slight headwind. Despite this, we still posted strong same-store results for the quarter and remain ahead of schedule on our integration efforts.

The stores that have been already remodeled to Casey's in prior periods have performed exceptionally well, and we expect to remodel CEFCO stores throughout the fiscal year. Now, with that disclaimer out of the way, I'd like to now go over our results and share some of the details in each of the categories. 7% on a two-year stack basis. 2%, up 30 basis points from the prior year.

Prepared food and dispensed beverage led the way. 3%. The majority of same-store sales growth was from traffic with minimal pricing. This was highlighted by great performance in whole pies with units up nearly double digits in the quarter.

6%. Energy drinks and nicotine alternatives continue to outperform the category with double-digit growth. The alcohol category, specifically beer, was a headwind during the quarter. 8 cents per gallon.

The Mid-Continent region saw an approximate 6% decline this quarter according to OPIS fuel gallons sold data, indicating that our play is working and we continue to gain market share and drive guest traffic. In the quarter, same-store operating expense, excluding credit card fees, increased 5%. Steve will provide some of the specific puts and takes related to operating expense changes, but I'm extremely proud of our operations team to be able to meet the increased food demand without meaningfully increasing store labor hours. The same-store labor hours were roughly flat for the quarter.

I'd now like to turn the call over to Steve to discuss the financial results from the first quarter. Steve Bramlage, Chief Financial Officer Thank you, Darren, and good morning. Before I begin, I also want to share my appreciation for our team members' hard work executing a plan during our busy summer months. It takes the entire organization's buy-in to be able to generate such strong results, which are not easy to achieve.

68 billion. 3%, from the prior year, due primarily to higher inside sales and a higher retail price of fuel. Higher fuel gallons sold also contributed. The results were favorably impacted by operating approximately 2% more stores on a year-over-year basis.

78 billion. 6%, from the prior year. 9%. Inside same-store sales had an approximate 25 basis point headwind from the Fikes construction.

99 per gallon, and total gallons sold increased by two and a half percent. The same-store gallons had an approximately 50 basis point headwind from the Fikes construction. We define gross profit as revenue less cost of goods sold but excluding depreciation and amortization. 7% on a two-year stack basis.

6%. 2%, and that's up 30 basis points from a year ago. The increase is primarily due to mix shift and solid cost of goods management. Also during the first quarter, we made a modest change in accounting for inside cost of goods sold related to internal distribution costs.

That had no net impact on inside margin in the aggregate, but it did create a slight tailwind to the PF&DB margin and a slight headwind to the grocery and GM margin. We believe this change better reflects the true cost of goods sold between the two categories. 3%. That's up 130 basis points from prior year.

11 per pound last year. It's a decrease of 9%, or an approximate 45 basis point benefit to the margin, along with the aforementioned distribution cost reclass. These two items accounted for all of the margin change in the quarter. 6%, a decrease of 30 basis points from the prior year, and that change is completely attributable to the distribution cost reclass.

8 cents per gallon from the prior year and, sequentially, about one penny stronger than the fourth quarter of fiscal 2026, which reflected the beginning of the Middle East conflict and the related volatility in global petroleum markets. 9 million, in the quarter. Approximately 2% of the total operating expense increase was due to unit growth, as we operated 64 more stores than the prior year. 5% to the increase, primarily due to the previously mentioned higher retail prices per gallon.

Same-store employee expenses accounted for approximately 1% of the increase due primarily to increases in labor rates, as same-store labor hours were roughly flat. Insurance, primarily same-store health care insurance, was responsible for approximately 1% of the increase. In addition, same-store repairs and maintenance and same-store utilities collectively made up approximately 1% of the increase. 1 million in the quarter.

8 million versus the prior year, which is primarily due to deleveraging associated with the Fikes transaction. Depreciation in the quarter was $116 million. That's up $7 million versus the prior year, primarily due to operating more stores. 7%.

That decrease was driven by an increase in tax benefits that were recognized on share-based awards. Our financial flexibility remains excellent. 4 billion. 5 times for the quarter.

Net cash generated by operating activities of $384 million less purchases of property and equipment of $194 million resulted in the company generating $190 million in free cash flow compared to generating $262 million in the prior year. The decrease in free cash flow is due in large part to the planned increase in capital expenditures from the CEFCO store remodels. 65 per share. During the first quarter we repurchased approximately $46 million in shares.

While we're off to a great start to the year, consistent with our past practice, we plan to update annual guidance on our second quarter earnings call when we are through the seasonally largest time of the year. Our results for August were as same-store volumes both inside and outside the store were consistent with our first quarter results and within our annual guidance ranges. 40 per gallon. Current cheese costs are slightly favorable versus the prior year.

We expect the second quarter operating expense increase to be similar to the first quarter, and that's partially driven by the increase in retail fuel prices as compared to the second quarter of fiscal 2026. I'll now turn the call back over to Darren. Darren Rebelez, Chief Executive Officer Thanks, Steve. As we just wrapped up our first quarter into the new plan, I'm as excited as ever about our progress.

Our food team is doing a tremendous job. Whole pies have continued their strong momentum in the quarter. Guests are flocking to the Casey's Rewards platform, as we're now over 11 million members. We believe our abundant and value-oriented food offering is not only a differentiator driving inside traffic, but is also driving traffic to the pump.

This, coupled with our fuel team doing an excellent job balancing fuel margin and gallons during an uncertain environment, has yielded great results. This is our three-legged business model in action. During fiscal year 2026, we remodeled approximately 50 CEFCO stores to Casey's. In the first quarter of fiscal year 27, we've remodeled 24 more stores.

We're extremely excited about the results we're seeing, as the average PF&DB lift at the stores that were remodeled to Casey's has been approximately 30% versus the results of the same period prior to remodel. While we're busy with CEFCO conversions, that has not stopped us from continuing to grow the store base, as we are on track to meet our 120-store unit goal for the fiscal year. Operational efficiency is another key pillar of the strategic plan. As we discussed at Investor Day, we expanded our continuous improvement efforts to include both the store and the enterprise as a whole.

We're off to a great start, as the team has completed a number of initiatives with many more on track for completion during the fiscal year both at the store and throughout the organization. Overall, I'm very proud of the team's execution of the plan. We look forward to building on the momentum we have going throughout the fiscal year and beyond. 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 only.

One moment while we compile our Q&A roster. Our first question comes from the line of Edward Kelly with Wells Fargo. Your line is open. Please go ahead.

Edward Kelly, Analyst at Wells Fargo Good morning, everyone. I wanted to start just on fuel margins. I was hoping that you can maybe talk about the trend in fuel margin during Q1. I think you said you had a very strong start last quarter, which I think a lot of us kind of assumed that maybe that was in the 50s.

Just curious what the rest of the quarter looked like. And then the underlying dynamics that drove that really robust Q4 performance and strong start. Just curious as to the sustainability of those dynamics through the quarter. And then just lastly related to all this, as you think about your mid-40s sort of margin guide, is anything you're seeing out there currently that sort of raises question about that at all?

Maybe talk about breakevens as part of that. Thank you. Steve Bramlage, Chief Financial Officer Hi, good morning, this is Steve.