Despite “flat” earnings overall, for its fiscal third-quarter 2025, Casey’s General Stores Inc. reported that both total fuel gallons sold and total inside sales were up, mainly because of unit growth driven by the acquisition of Fikes Wholesale and its CEFCO convenience stores, but offset by operating costs for those more than 250 locations.
“Casey’s delivered an excellent third quarter highlighted by strong sales growth both inside and outside the store,” said Darren Rebelez, chairman, president and CEO. “Inside same-store sales were driven by the prepared food and dispensed beverage category, with hot sandwiches and bakery performing quite well. Our fuel team did a tremendous job achieving same-store gallon growth of 1.8% while maintaining a solid fuel margin. Total fuel gallons sold were up 20.4% while total inside sales rose 15.3% primarily due to unit growth, including the Fikes acquisition. The operations team’s focus on serving our guests efficiently is paying off, as we reduced same-store labor hours for the 11th consecutive quarter.”
Darren Rebelez was CSP’s 2024 Retail Leader of the Year.
For the quarter, net income was $87.1 million, “essentially flat” from the prior-year quarter’s $86.9 million, and earnings before interest, taxes, depreciation and amortization (EBITDA) was $242.4 million, up 11.4% from $217.6 million in the same period a year ago.
Inside same-store sales of $1.4 billion increased 3.7% compared to the prior-year quarter’s $1.2 billion, and 8% on a two-year stack basis, with an inside margin of 40.9%. Total inside gross profit increased 14.3% to $573.1 million compared to the prior-year quarter’s $501.5 million.
Same-store fuel gallons were up 1.8% compared to the prior-year period with a fuel margin of 36.4 cents per gallon (CPG). Total fuel gross profit increased 17.4% to $302.1 million compared to the prior-year quarter’s $257.2 million.
Same-store operating expenses of $670.2 million, excluding credit card fees, were up 3.2% over the prior-year quarter’s $569 million, favorably affected by a 2% reduction in same-store labor hours.
For the quarter, EBITDA was up primarily due to higher inside and fuel gross profit, partially offset by higher operating expenses from operating 254 additional stores, as well as one-time Fikes deal and integration costs of approximately $13 million. Net income was flat due to higher interest expense related to debt taken on from the Fikes transaction as well as higher depreciation from operating more stores.
Total inside sales were up 15.3% for the quarter. Same-store inside sales of 3.7% were driven by strong performance in the prepared food and dispensed beverage category, including hot sandwiches and bakery as well as nonalcohol beverages in the grocery and general merchandise category. Inside margin was down 40 basis points compared to the same quarter a year ago, driven primarily by the effect of the stores from the Fikes acquisition as well as a coffee promotion to feature new flavor profiles.
For the quarter, total fuel gallons sold increased 20.4% compared to the prior year due to the store count increase as well as same-store gallons which were up 1.8% versus the prior-year period. The company’s total fuel gross profit was up 17.4% versus the prior-year period, while the increase in gallons sold was partially offset by a decrease in fuel margin, driven primarily by the effect of the stores from the Fikes acquisition.
Operating expenses increased approximately 18% during the third quarter. Operating 254 more stores than the prior-year period accounted for approximately 14% of the increase, including one-time deal and integration costs of approximately $13 million from the Fikes acquisition. Same-store employee expense contributed to approximately 1% of the increase, as the increases in labor rates were partially offset by a reduction in same-store labor hours.
Expansion
As of Jan. 31, 2025, Casey’s owned a total of 2,993 convenience stores, up from 2,658 as of April 30, 2024. The net increase included 229 acquisitions (one not opened), 21 new builds and 14 closed stores.
For fiscal-year 2025, the company now expects EBITDA to increase approximately 11%. It expects the cost to purchase property and equipment to be approximately $500 million.
For its total fiscal-year 2025 outlook, the company expects same-store inside sales to increase approximately 3% to 5% with inside margin to be comparable to the prior year. The company expects same-store fuel gallons sold to be negative 1% to positive 1%. It expects total operating expenses to increase 11% to 13% for the fiscal year, including approximately $25 million to $30 million in one-time deal and integration costs related to the Fikes acquisition, while it expects same-store operating expense excluding credit card fees to only increase 2% for the year. It expects net interest expense to be approximately $90 million for the year, depreciation and amortization to be approximately $410 million and the tax rate to be approximately 23% to 25% for the fiscal year.
Casey’s expects to add approximately 270 stores for the fiscal year.
Casey's General Stores Inc. is No. 3 on CSP’s 2024 Top 202 ranking of convenience-store chains by store count.
Casey’s, based in Ankeny, Iowa, operates more than 2,900 c-stores in the greater Midwest under the Casey’s and GoodStop brands and in Texas under the Lone Star Food Stores and CEFCO brands. The company is the third-largest convenience-store retailer, the fourth-largest holder of liquor licenses and the fifth-largest pizza chain in the United States.
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