Caseys General Stores Inc Q1 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Pooran Sharma - Stephens Inc - Analyst : Good morning and congrats on the strong quarter here. Thanks, guys. Yes, I just want to start off with maybe understanding these costs. You mentioned they're slightly favorable versus the prior year. Was just maybe wondering if you could help us unpack that benefit a little bit. And if you could help us understand how much of your needs you have booked for the year?

Question: Pooran Sharma - Stephens Inc - Analyst : Yeah. Just wondering if you could help us unpack the benefit from lower cheese cost and help us understand how much of your needs you have booked for the year.

Question: Pooran Sharma - Stephens Inc - Analyst : Okay. I appreciate that color there. And I just wanted to understand kind of the strength behind the fuel business. I mean, you mentioned it in your prepared comments, you're outpacing the region. You have a strong offering that drives traffic inside the store. But maybe I was wondering if you could talk about Fuel 3.0 last quarter, I think you said about 3% of your supply was coming in from this initiative. So I was wondering if you could provide us with an update on that initiative?

Question: Charles Grom - Gordon Haskett Capital Corp - Analyst : Hey, thanks. Great quarter. I was wondering if you could just speak to the overall health of your consumer across income cohorts, any incremental evidence of trade down. And then regionally, seeing the note in the border stores, Texas region?

Question: Charles Grom - Gordon Haskett Capital Corp - Analyst : (multiple speakers) originally?

Question: Charles Grom - Gordon Haskett Capital Corp - Analyst : Okay. I appreciate that. And then my follow-up question is just on the CEFCO business, the drag on the prepared foods line. In particular, I believe in the back half of last year, it was around 150, 160 basis points, you called out about 110 basis points this quarter, which is a really nice improvement. Can we dive into that? What are you guys making progress on? And how should we think about that drag on the total business in the coming quarters?

Question: Bobby Griffin - Raymond James - Analyst : Hey, guys. Thanks for taking the questions and a great start to the fiscal year. I guess, Darren, first, I just wanted to maybe touch on the wings test, if there's anything more you can share there? I know you guys are still in kind of very early learnings, but we touched on it last quarter. Just curious, anything incremental over the last couple of months.

Question: Bobby Griffin - Raymond James - Analyst : Fair enough. And I appreciate those details. And then I guess, secondly, it does seem the last couple of quarters, the core prepared food business out of Casey's has really found some nice momentum on the margin side, enough so that you can offset the Fikes dilution. Can you maybe unpack that a little bit more? I mean, I think you guys mentioned Fikes is a 110-basis point drag. So it implies the core was up nicely. How much is left there? And kind of what do you think that -- does that create a better pricing opportunity for you guys to even push harder on competition? Or how do you think about that if this core margin improvement is sustainable?

Question: Anthony Bonadio - Wells Fargo Securities LLC - Analyst : Yeah. Hey, guys, good morning. Thanks for taking our question. So just to dig in a little bit on that earlier fuel question. A lot of your peers are sort of struggling to just try to water on fuel gross profit dollars. And you guys managed to grow both same-store gallons and fuel margins with the Fikes headwind in there. So can you just talk a little bit more about what you think is driving that dispersion and then what you're seeing out there competitively, just given some of the commentary we're hearing from your peers.

Question: Michael Montani - Evercore Inc - Analyst : Yes, hi, good morning. Thanks for taking the question. Just wanted to ask a two-parter. First off, I was wondering if you could comment a little bit about the M&A backdrop that you're seeing out there, both in terms of smaller deals and then also potentially the larger kind of 50-plus store deals. So that was one thing. And then the other one was just on seasonality. I understand you don't want to update the full year guide, but in the past, 2Q earnings power is usually pretty similar to 1Q and then you get maybe a 40%, 50% step down in the back half of the year. So just wanted to understand if there's any puts or takes on the timing side or otherwise, we need to keep in mind when we're thinking about kind of the sequential earnings cadence through the year?

Question: Bonnie Herzog - Goldman Sachs Group Inc - Analyst : Hi, thank you, good morning, everyone. Maybe just a quick follow-up on this topic just in terms of phasing because I you guys mentioned previously that you expected this fiscal year to be more second half weighted given the timing of the Fikes acquisitions. So I'm just thinking about in the context, the strength in Q1. First, love to hear how the quarter came in maybe relative to your internal expectations? And then I guess if it was a little bit stronger, does it suggest maybe some conservatism to your guidance this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 09, 2025 / 12:30PM, CASY.OQ - Q1 2026 Caseys General Stores Inc Earnings Call

Question: Bonnie Herzog - Goldman Sachs Group Inc - Analyst : Okay. And then just one other quick question on promos. You did mention that, that really helped drive traffic and strength inside the store in the quarter. So could you maybe quantify your spend levels this quarter versus the prior quarter than maybe year-over-year? I guess I'm just hoping

Question: Kelly Bania - Bank of Montreal - Analyst : Good morning. Thanks for taking our questions. Just wanted to go back to CEFCO now coming up almost on a year, I guess, 10 months. And just curious if there's any more learnings that you can share or even refinements to that original plan for the $45 million in synergies. It sounds like there's some very basic changes that you've been able to make on the inside of the store that's helping margins. But just as you kind of step back big picture, and can you give us a little more color about how CESCO stores are comping and the competitive environment that they're facing.

Question: Corey Tarlowe - Jefferies LLC - Analyst : Great, thanks. And I guess, Darren and Steve I wanted to ask about the grocery and general merchandise category. What's driving the growth? I'm assuming energy drinks is helping. And then second, on the margin for the category, I think this is the best gross margin that you've had for the category in a really long time in the first quarter. Could you talk a little bit about the drivers of that? And maybe what helped, what -- as we think about what's ahead, maybe what stays in and what comes out? Any color you could provide there would be really helpful. Thanks so much.

Question: Corey Tarlowe - Jefferies LLC - Analyst : Got it. That's really helpful. Is there any way to put into context maybe what that could look like more going forward for the gross margin for that category (multiple speakers) Should we expect to expect something close to 36%. I mean the category has historically been in the low 30s. So I'm just curious how do you think about the trajectory there? Thanks so much.