Nicotine alternatives saw double-digit margin growth in Casey’s first-quarter 2027 financial results, the convenience-store retailer reported Wednesday.
- Casey’s General Stores is No. 3 is on CSP’s 2026 Top 202 ranking of U.S. c-store chains by store count.
“Nicotine alternatives continue to outperform the category with double-digit growth,” Darren Rebelez, chairman, president and CEO, said. Same-store grocery and general merchandise sales were up 2.7%, or 6.5% on a two-year stack basis, with a gross profit margin of 35.6%, the company reported.
During the question-and-answer session of the call, Rebelez said as secular decline in combustible cigarettes continues, nicotine alternatives are starting to replace that lost volume.
“Now, it’s not a one for one yet,” Rebelez said, according to a transcript from AlphaSense. “It hasn't quite grown that fast. But if you think about how the categories are trending, with cigarettes down 1% or 2% on a sales basis and down 5% or 6% on a unit basis, nicotine alternatives [were] up 47% in the quarter. You can see where that change is going to come here soon.”
From a space allocation standpoint, Rebelez credited Casey’s merchandising team.
“We reset those nicotine back bars to reduce the combustible cigarette space to make more room for nicotine alternatives,” Rebelez said, adding that the move a couple of years ago was one of the first in the industry to do that.
“It’s really accrued to our benefit,” he said. “I think that’s one of the reasons that you see the strength in that category today in our stores.”
Rebelez told investors on the call that Casey’s did another adjustment this past fiscal year to give even more space to the nicotine alternative.
“The category overall is definitely shifting in favor of those alternatives, and we expect to be a leader in that space,” he said.
Ankeny, Iowa-based Casey’s has 2,921 convenience stores and is the third-largest c-store retailer in the United States.
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