Nicotine alternatives helped drive growth for Casey’s General Stores Inc. in third-quarter 2026, with the retailer’s nicotine pouch business up 31% and vapor rising 12%, executives said during the company’s earnings call Tuesday.
“Both carry more than double the margin rate of combustible cigarettes,” Casey's President and CEO Darren Rebelez said, according to a transcript from financial services site AlphaSense.
The growth in nicotine alternatives is helping improve margins in the retailer’s grocery and general merchandise segment as cigarette sales continue to decline, he said. From a unit perspective, cigarette sales are still dropping, but not at the pace seen in previous quarters.
“What we’ve seen a little bit more recently is the decline in combustibles has slowed a bit,” Rebelez said.
When asked about whether these newer tobacco alternatives has the potential to return the tobacco category as a whole back to positive growth, Rebelez said the company is starting to see some growth in the overall nicotine category.
“Yeah, I do think there is that potential,” he said.
Other c-store retailers have reported similar trends. During its fourth-quarter 2025 results on Feb. 25, Arko Corp., the parent company of convenience-store retailer GPM Investments, said in the nicotine category the company picked up market share in every category in 2025.
- Casey's General Stores Inc. is No. 3 on CSP's 2025 Top 202 ranking of convenience-store chains by store count. GPM Investments is No. 7.
“We built momentum in the fourth quarter and that momentum has carried into 2026,” said Arie Kotler, chairman, president and CEO of Arko.
Kotler said the other tobacco products (OTP) segment for the year was up 4%.
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