Casey’s General Stores (NASDAQ:CASY) reported first-quarter fiscal 2027 diluted earnings per share of $7.37, up 28% from the prior year, as higher prepared-food sales, expanded inside margins and stronger fuel profitability lifted results.
Net income increased 27% to $274 million, while EBITDA rose 17% to $485 million. Total revenue climbed 24.3% to $5.68 billion, driven primarily by higher inside sales, a 33% increase in the average retail fuel price to $3.99 per gallon, and a 2.5% rise in total fuel gallons sold. The company also operated 64 more stores than a year earlier.
Inside Sales and Food Lead Results
Inside same-store sales increased 3.2% during the quarter, or 7.7% on a two-year stacked basis. Inside gross profit margin improved 30 basis points from a year earlier to 42.2%.
Prepared Food and Dispensed Beverages, or PF&DB, was the strongest category. Same-store sales in the segment rose 4.8%, or 10.7% on a two-year stacked basis, while gross margin reached 59.3%, up 130 basis points year over year. The majority of the sales gain came from traffic rather than pricing, according to Rebelez, with whole-pizza unit sales rising by nearly double digits.
Chief Financial Officer Steve Bramlage said lower cheese costs and an internal distribution-cost accounting reclassification accounted for the PF&DB margin expansion. Cheese cost $1.93 per pound in the quarter, down 9% from $2.11 per pound a year earlier, providing an approximate 45-basis-point benefit to margin.
Grocery and general merchandise same-store sales rose 2.7%, or 6.5% on a two-year stacked basis. The category’s gross margin was 35.6%, down 30 basis points, entirely due to the distribution-cost reclassification, Bramlage said.
Management said energy drinks, nicotine alternatives and non-alcoholic beverages were positive contributors. Nicotine-alternative sales increased 47% in the quarter, while energy sales rose 12%. However, beer, snacks and cigarettes weighed on grocery and general merchandise results.
Rebelez attributed snack-category pressure largely to pricing by national chip brands, noting that national-brand chips were down about 8% while Casey’s private-label chip unit sales rose 16%. He also said ready-to-drink cocktail sales increased more than 30%, partially offsetting weakness in beer.
Fuel Margin Rises Despite Volatile Market
Same-store fuel gallons declined 0.3% in the quarter but increased 1.4% on a two-year stacked basis. Fuel margin increased 6.8 cents from the prior year to 47.8 cents per gallon.
Management said fuel-market conditions were volatile amid developments related to the Middle East conflict and global petroleum markets. Bramlage said margins fluctuated substantially during the quarter, with some days in the 60-cent range and others in the 30-cent range, although most days were in the 40s.
Rebelez said the company’s same-store gallon result included an approximately 50-basis-point headwind from construction associated with CEFCO store conversions. Excluding that effect, he said gallons would have been approximately 20 basis points higher. He added that the Mid-Continent region experienced an approximate 6% decline in fuel gallons, according to OPIS data, indicating Casey’s continued to gain share.
The company also observed that customers were buying fewer gallons per fuel trip but making more trips, while shifting from premium and mid-grade fuel toward regular gasoline and higher-ethanol blends. Rebelez said higher-ethanol fuels carry a higher margin than clear gasoline.
CEFCO Integration Creates Near-Term Disruption, With Strong Early Results
Casey’s continued integrating the Fikes acquisition and remodeling legacy CEFCO locations. Construction activity affected approximately 1% of the company’s total store base during the quarter, resulting in an estimated 25-basis-point headwind to inside same-store sales and a 50-basis-point headwind to same-store fuel gallons.
The company remodeled 24 CEFCO stores in the first quarter, following roughly 50 remodels during fiscal 2026. Rebelez said remodeled locations have generated an average PF&DB sales lift of approximately 30% compared with their results before remodeling.
However, he said the current group of remodels requires more extensive work than earlier conversions, with locations disrupted for roughly four to six weeks. Management expects the construction-related drag to remain through the second quarter and likely not meaningfully inflect until the fourth quarter of fiscal 2027.
Casey’s remains on track to add 120 stores during the fiscal year. Management expects approximately half of those additions to come from new-to-industry construction and half from smaller acquisitions. Rebelez said the acquisition environment remains favorable, particularly for smaller operators facing a difficult operating environment.
Expenses, Cash Flow and Outlook
Total operating expenses rose 8%, or $55.9 million, in the quarter. Unit growth accounted for approximately 2 percentage points of the increase, while same-store credit-card fees added about 1.5 percentage points due to higher fuel prices. Same-store employee expenses contributed about 1 percentage point, primarily because of wage-rate increases, while labor hours remained roughly flat.
At quarter-end, Casey’s had $1.4 billion of available liquidity and a credit-facility debt-to-EBITDA ratio of 1.5 times. Operating cash flow was $384 million, and capital expenditures totaled $194 million, producing free cash flow of $190 million, down from $262 million a year earlier. Bramlage said the decline reflected planned capital spending for CEFCO remodels.
The board maintained the quarterly dividend at $0.65 per share, and the company repurchased approximately $46 million of shares during the quarter.
Management did not update full-year guidance, saying it typically does so following the seasonally significant second quarter. For August, the company said same-store inside and outside volumes remained consistent with first-quarter trends and within annual guidance ranges. Fuel margin was in the low-40-cent-per-gallon range, while current cheese costs were slightly favorable compared with the prior year.
About Casey’s General Stores (NASDAQ:CASY)
Casey’s General Stores, Inc (NASDAQ: CASY) is a U.S.-based convenience store chain that operates retail fuel stations and food-focused convenience outlets. Founded in 1959 in Boone, Iowa, the company has grown from a single neighborhood store into a regional operator known for combining traditional convenience retailing—fuel, packaged goods and tobacco—with a larger emphasis on fresh and prepared foods.
The company’s stores typically offer gasoline and diesel alongside a range of grocery essentials, grab-and-go items and made-to-order foodservice.
