Caseys General Stores Inc Q4 2024 Earnings Call Summary

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

Question: Michael Montani - Evercore ISI - Analyst : Hey, good morning. Congrats on the results. Just wanted to ask if I could, if you all can discuss some of the value gaps that you're seeing out there today in terms of your prepared mood -- meals versus fast food competition? And what are you doing to drive newness and innovation, whether it's with LTOs or trying to win a second night of the week like you do in pizza?

Question: Michael Montani - Evercore ISI - Analyst : Thank you for that. I guess the follow-up, if I could, was just around the margin commentary that it could be comparable for inside store. So I'm just wondering, Darren or Steve, if you can talk about some of the puts and takes that you see there. You definitely mentioned the cheese block prices. Just how to think about that over the course of the year? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 12, 2024 / 12:30PM, CASY.OQ - Q4 2024 Caseys General Stores Inc Earnings Call

Question: Bobby Griffin - Raymond James - Analyst : Thanks for taking my questions and congrats on a great quarter. I guess first off I just wanted to see could you break out or give a little color on the difference between traffic and ticket inside the prepared food business or even just inside the store in general? Really strong results this quarter, so just curious how it moves throughout the quarter on a traffic and ticket basis.

Question: Bobby Griffin - Raymond James - Analyst : Perfect. Good balance there. And Darren, I guess my second question or the follow-up is just on more high level. You guys are trending pretty close to right now 8 million Reward Members. Where are you on the journey of leveraging that? Is there still a big opportunity there? Or is it more just incremental benefits over the next couple of years? Just curious in your thoughts around on that as that member profile continues to get larger? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 12, 2024 / 12:30PM, CASY.OQ - Q4 2024 Caseys General Stores Inc Earnings Call

Question: Anthony Bonadio - Wells Fargo Securities, LLC - Analyst : Good morning, guys. Nice quarter. So I wanted to ask about fiscal '25 guidance in the context of the three-year plan. Year one clearly finished quite a bit ahead of what all of us initially expected, so understanding that there was likely some pull forward versus plan. Can you just talk about one, why the low end of the multi-year CAGR is the right growth rate for '25 given the level of momentum in the business right now. And then two, how does your performance in year one change how you're thinking about what you can ultimately achieve by year three?

Question: Krisztina Katai - Deutsche Bank - Analyst : Hey, good morning and congratulations on very strong results. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 12, 2024 / 12:30PM, CASY.OQ - Q4 2024 Caseys General Stores Inc Earnings Call I wanted to ask about grocery and general merchandise that you saw that acceleration sequentially on same-store sales. And I know, you talked about some modest retail price adjustments that you talked -- that you took last quarter. So just wanted to get your thoughts on how you see consumers' ability to continue to absorb higher prices. And I'm asking this in the context of many food retailers that have now started to announce price cuts. And then just how do you see the dynamic play out in that segment for the balance of the year, promotions have been rising.

Question: Krisztina Katai - Deutsche Bank - Analyst : Got it. And if I could just follow up on fuel margins which came in better than what the Opus data would have suggested. Maybe can you talk about what transpired in your markets from a pricing perspective? And I'd be curious to hear the strength of your margins in the context of same-store gallon growth that you also put up, which significantly outpaced the overall industry as well? Thank you.

Question: Kelly Bania - BMO Capital Markets - Analyst : Wanted to ask just about the low-income cohorts. I think in recent quarters, you've talked about how the fastest growth inside the store was coming from the low-income cohort's. I was just curious if you are still seeing that dynamic playing out or if that's changing? And I guess that maybe is attributed to your value positioning, but just wanted to check in on that. And then also just as you think about the fiscal '25 plan, are you expecting QSR to get more competitive? Because it does seem like there's some more challenges there and maybe some more value price coming within the QSR space. So just curious what's in your plan with respect to that.

Question: Kelly Bania - BMO Capital Markets - Analyst : That's very helpful. I just also wanted to just ask about fuel a little bit just number one, how is diesel impacting the fuel margins or how did it in the quarter? And then just maybe an update on the fuel arbitrage strategy and the timing of getting that really into motion? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 12, 2024 / 12:30PM, CASY.OQ - Q4 2024 Caseys General Stores Inc Earnings Call

Question: Chuck Cerankosky - Northcoast Research - Analyst : Good morning, everyone. Great quarter. Can you talk a little bit about logistics over the next 12 to 24 months, the company's getting bigger, store growth has been considerable. Any new need for distribution centers, what might you be doing with trucking, and maybe applying IT to your routing and so forth to further streamline costs?

Question: Corey Tarlowe - Jefferies LLC - Analyst : Darren, you mentioned that I think labor hours had been reduced now for, I believe, eight straight quarters. How much more opportunity do you think there is to continue to drive efficiency in the stores in this fashion?

Question: Corey Tarlowe - Jefferies LLC - Analyst : Got it. That's very helpful. I just wanted to follow up on private label. What are some recent successes that you've seen within that segment and within your expectations for this year, how are you playing that business? Thank you.

Question: John Royall - J.P. Morgan Securities LLC - Analyst : The first one is, can you talk about how we should think about the mix of build versus acquisition in the 100-plus store additions in fiscal '25? Should we assume from the increase in CapEx that new store portion is accelerating? Or just any color on that would be helpful.

Question: Irene Nattel - RBC Capital Markets - Analyst : Just a couple of follow-ups. On the private label piece, can you update us on current penetration, please?

Question: Irene Nattel - RBC Capital Markets - Analyst : That's great, thank you. And then just tying together the innovation piece with the consumer spending piece. As you think about F25, '26 and the new product development pipeline, to what degree are you taking into account some of the pressure on consumer pocketbooks to -- if you will offer the right types of products for the current environment.

Question: John Lawrence - The Benchmark Company LLC - Analyst : Great. Thanks, guys. Great quarter. Would you speak to a little bit about Casey Rewards and talk about the difference in spend for somebody that's really engaged on the rewards program versus somebody that's not and just how that has changed over the last couple of years started?

Question: Bonnie Herzog - Goldman Sachs & Co. LLC - Analyst : I had a question on your inside margins. You saw strong expansion last year, but are guiding margins to be flat this year. And I know you touched on cheese costs, but hoping you could just highlight any other headwinds or tailwinds that we should be mindful of this next fiscal year.

Question: Bonnie Herzog - Goldman Sachs & Co. LLC - Analyst : Okay. That's helpful. And I know a lot's been asked already, but maybe a big picture question on from me. Darren and I guess, Steve, as you guys sit here today, where do you see the biggest opportunity for upside to your guidance in FY25 and as well as maybe where you see the biggest risk to your business? Thanks.