Casey’s Earnings: Strong Food Sales and Fuel Margins Power Another Standout Quarter
- Hardik Shah
- 2 days ago
- 5 min read
TLDR
Revenue Strength: Double-digit growth fueled by higher inside sales and rising fuel gallons.
Margin Trends: Inside margin expanded; fuel margins remained elevated despite lower pump prices.
Forward Outlook: Reaffirmed same-store goals and expects mid-teens EBITDA growth for FY26.
Inside America’s Fastest-Growing Rural Convenience Chain
Casey’s General Stores closed its fiscal second quarter with the kind of consistency investors increasingly expect from the Midwestern operator, delivering another period of steady inside sales growth, resilient fuel profitability, and disciplined operating execution.
The company, which now runs 2,921 stores across 19 states, continues to extend its long-run advantage in smaller communities, where brand loyalty, foodservice differentiation, and a strong value proposition matter more than urban foot traffic.
Behind the numbers is a company leaning more heavily than ever on the strategy that has defined its rise: lean operations, a growing prepared-food franchise, and a fuel business that performs well even in choppy commodity markets.
Revenue Momentum Carries the Quarter
Casey’s earnings: $4.51 billion in revenue, up sharply from a year ago, as both inside sales and fuel gallons exceeded expectations. Sale growth in prepared food once again set the pace—whole-pie pizza, breakfast sandwiches, and hot food items helped deliver a 12% jump in foodservice revenue, reinforcing the chain’s positioning as a quick-service restaurant embedded in a convenience format.
“Whole pies and hot sandwiches performed exceptionally well, and breakfast was a standout with products like our maple waffle sandwich showing how innovation is resonating with guests.” - Darren Rebelez, CEO
Grocery and general merchandise also performed well, rising 13.4%, with non-alcoholic beverages, energy drinks, and nicotine alternatives contributing to strong category mix.
Fuel sales increased despite lower average retail prices, as Casey’s drove 0.8% same-store gallon growth—a meaningful outperformance in a market where broader regional fuel consumption declined.
Margins Hold Firm as Mix Improves
If Casey’s topline momentum was expected, its margin strength underscored the company’s disciplined execution. Inside margins widened to 42.4%, lifted by mix toward higher-margin energy drinks and noncombustible nicotine products. Foodservice margins held up well, especially given dilutive effects from acquired stores not yet fully integrated into the Casey’s model.
Fuel margin—historically volatile—remained a steady contributor at 41.6 cents per gallon, supported by stable diesel sales and rising premium demand. Despite lower rack prices, the company maintained pricing discipline and continued to gain market share.
Gross profit overall climbed sharply, outpacing expense growth and helping drive 14% net income growth.
“We continued to grow fuel gallons even as the region declined, showing that our strong inside offering and consistent pricing discipline are driving market share gains.” - Darren Rebelez, CEO
Guidance: Steady Confidence, Few Surprises
The company reaffirmed most of its annual expectations and raised its outlook for full-year EBITDA growth to 15–17%. Management continues to expect:
3–4% inside same-store sales growth
41–42% inside margin
24–25% effective tax rate
Fuel margins are expected to follow typical winter seasonality, with softer results in the back half of the year. But the company signaled no concerns about underlying demand or mix dynamics.
The integration of CEFCO stores—acquired last year—will become more visible as rebranding, kitchen installations, and assortment resets accelerate early next year. These stores currently carry lower food and merchandise margins, but Casey’s believes its model will lift profitability over time.
Operational Execution Remains a Competitive Asset
Even as inflation continues to pressure wages, utilities, and insurance, Casey’s maintained tight control over same-store labor hours, keeping them flat while driving meaningfully higher sales volumes. Additional staffing was deployed to support a surge in pizza demand on key promotional days, but productivity gains and improved waste management kept operating leverage intact.
The quarter also reflected higher operating costs tied to new stores, technology investments, and incentive compensation, but the company’s gross profit growth more than offset these pressures.
Notably, Casey’s reported its highest guest satisfaction scores on record—a signal that operational tightening has not compromised service quality.
A Changing Market, but a Familiar Playbook
Several shifts in consumer behavior continued to work in Casey’s favor. Guests consolidated trips due to fuel prices and household budgeting, increasing reliance on convenience formats. Beverage and nicotine categories saw ongoing migration toward premium and alternative products—areas where Casey’s has broadened assortment and shelf-space allocation.
On the fuel side, broader Midcontinent demand softened, yet Casey’s grew gallons, suggesting its dual traffic engine—food plus fuel—continues to outperform more fuel-dependent peers.
The company is also selectively expanding its EV charging footprint—232 chargers across 48 stores—while avoiding overextension in markets where adoption remains low.
Strategic Investments Stay Focused
Casey’s remains deliberate about where it deploys capital and how it grows.
Foodservice innovation remains a centerpiece, with continued experimentation in breakfast, pizza, and daypart expansion.
Acquisitions continue but remain disciplined; the company favors “tuck-ins” with kitchen-ready footprints that can support Casey’s proprietary food model.
Digital investments, including loyalty and personalized promotions, deepen guest engagement and underpin inside sales momentum.
Meanwhile, renewable fuel capabilities—ethanol blends, biodiesel pumps, and infrastructure planning for future demand—reflect a pragmatic energy-transition roadmap.
Capital Allocation: Balanced and Opportunistic
Liquidity remains strong at $1.4 billion, and leverage sits at a comfortable 1.7x, allowing Casey’s to stay flexible.
“For us, it's not just a matter of buying something for the sake of buying it. We need the right level of asset quality that we're able to put our kitchens into those stores and really run our play.” - Darren Rebelez, CEO
The company:
Maintained its quarterly dividend at $0.57
Raised its share repurchase target to $200 million (up from $125 million)
Continued to invest heavily in store builds, remodels, and distribution and wholesale fuel infrastructure
— Darren Rebelez, Chairman, President & CEO
Free cash flow for the quarter reached $176 million, up from the prior year.
The Bottom Line
Casey’s delivered another dependable quarter, reinforcing why it has become one of the most consistent growth stories in the convenience and fuel retail landscape. Inside sales remain strong, fuel margins continue to outperform market conditions, and cost discipline is holding despite inflationary pressure.
Looking forward, three themes stand out:
Integration leverage — As CEFCO stores convert to the Casey’s model, margins should structurally improve.
Foodservice momentum — Whole pies, breakfast items, and promotional innovation remain high-return levers.
Steady capital deployment — A disciplined mix of dividends, buybacks, and operational investments supports long-term value creation.
Casey’s continues to execute a strategy that works in any macro backdrop: serve local communities well, grow steadily where competition is fragmented, and let food, fuel, and operational rigor do the rest.
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